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A statue in front of a residential site in Shanghai. China's property investment increased 21.1 percent year-on-year in the first four months, up 0.9 percentage points on the first quarter. Jing Wei / for China Daily
Investment rises 21.1% in past four months, sales value eases to 59.8%
China's real estate investment growth quickened in the first four months of the year, but property sales growth dipped slightly due to the government's latest round of policy tightening.
Property in-vestment, which affects more than 40 industries ranging from steel to furniture, increased 21.1 percent year-on-year from January to April, up 0.9 percentage points on the first quarter, the National Bureau of Statistics said on Monday.
"The improvement was probably as a result of the still robust housing sales," said Yao Wei, China economist with Societe Generale SA.
"The tightening measures seem slow to bite, which may allow developers to contribute some more strength in the second quarter."
Growth in the sales value of commercial residential housing in the first four months eased to 59.8 percent from a rise of 61.3 percent during the January to March period.
The amount of floor space sold grew 38 percent, up 0.9 percentage points on the first three months.
Strong sales and easier credit have enabled property developers to quicken their construction activity.
Construction of new homes rose 1.9 percent in the first four months of 2013, up from a decline of 2.7 percent in the first quarter, according to the NBS.
But the total land area bought by developers fell 8.6 percent during the January-April period, easing from a drop of 22 percent in the first quarter.
The quickening real estate investment and slowing sales figures were in line with the expectations of some analysts.
Moody's Investors Service said in a recent research note that it had a stable outlook for China's property market.
It said developers focused on the mass market will enjoy the strongest level of sales, including the likes of China Overseas Land & Investment Ltd, China Vanke Co Ltd and Longfor Properties Co Ltd.
"The stable outlook reflects our expectation for around 10 percent year-on-year growth in the value of residential property sales over the next 12 months, in line with the average seen in 2012 but down from the high levels seen during January-March 2013," said Kaven Tsang, a Moody's vice-president.
Property prices in China's major cities rose for the 11th consecutive month in April, according to a report by China Index Academy, a Beijing-based real estate research institute.
But the growth rate slowed slightly as the government's latest tightening policies gradually kicked in.
The average price of new homes in 100 monitored cities was 10,098 yuan ($1,600) per square meter during April, up 1 percent over the previous month, according to the academy. The month-on-month growth rate is down 0.06 percentage points from March.
Meanwhile, home transactions in the new and pre-owned home markets slumped in most cities in April, due to the government's cooling measures.
However, Chinese developers are still on track to meet their sales targets for 2013, said an industry report by Standard & Poor's Ratings Services.
"The developers' sales targets may appear aggressive, but the strong sales so far in what is usually a slow selling season suggests it could be mission possible," said Standard & Poor's credit analyst Bei Fu.
"While we expect some of the sales momentum to lose steam, overall performances should be good for full-year 2013."
The report notes, however, that the governments of top-tier cities are likely to be more stringent in implementing new regulations, which could have a dampening effect on transaction volume.
"We continue to assume up to 10 percent growth this year in transaction volume for bigger players and limited growth for smaller players. We expect 5 percent growth in average selling prices," said Fu.
"Given the mix of opportunity and challenges, we maintain our stable outlook on the sector."
(China Daily 05/14/2013 page17)