China property investment slows further, but slump in sales shows signs of easing

Thu Nov 13, 2014 3:06am EST
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By Xiaoyi Shao and Jake Spring

BEIJING (Reuters) - Growth in China real estate investment slowed further in the first 10 months of 2014, but property sales showed some signs of improvement, indicating Beijing's efforts to boost the ailing sector may be starting to have an effect.

Property investment, which affects more than 40 other sectors from cement to furniture, grew at its slowest pace in over five years between January to October, rising 12.4 percent from the same period a year earlier, the National Bureau of Statistics(NBS) said on Thursday.

That compared with a rise of 12.5 percent in the first nine months and was the slowest pace since July 2009.

"Slowing property investment growth has continued to drag on China's broad economy," said Du Zhengzheng, an economist at China Development Bank Securities in Beijing.

"We expect the trend will continue in coming months even though sales picked up."

Property sales fell 1.6 percent in October in terms of floor space, easing substantially from September's 10.3 percent drop.

That came after Beijing announced steps in September to support the sluggish property market, including lower mortgage rates and down payments for some home buyers

"Those are early signs that there may not be a collapse of the property market and the recent measures may have stabilized the momentum of property investment," said Shuang Ding, an economist at Citi in Hong Kong.   Continued...

A worker cleans an apartment block in Beijing, October 18, 2014. Growth in China's residential land prices slowed for the second straight quarter in July-September, the land ministry said, underlining cooling momentum in the property market. . REUTERS/Jason Lee