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     BEIJING (MNI) - The Chinese property sector slowed in November, as
expected, though continued strong land purchases and robust housing starts
indicated continued optimism in the property market outlook.
     Property investment grew 7.5% y/y to CNY10.0387 trillion in the first 11
months of the year, with the growth rate slowing 0.3 percentage point from
January-October,  the National Bureau of Statistics said Thursday. Residential
property investment, which accounted for 68.4% of total property investment,
stood at CNY6.867 trillion, with the 9.7% growth rate down 0.2 percentage point
compared with the first 10 months.  
     --Property Sales Down
     Property sales growth decelerated to 7.9% in the first 11 months from 8.2%
in the January-October period. Among sub-categories, residential property sales
growth slowed to 5.4% from 5.6% in the previous period. Sales growth for office
buildings slowed 1.5 percentage points while sales growth for business operation
units was down 2.1 percentage points.
     Measures enacted by the Chinese government to rein in skyrocketing housing
prices this year led to the slowing of sales growth, Yan Yuejin, director of the
E-house Real Estate Institute, said in a note Thursday after the NBS data
release. But the overall property sales growth rate of 7.9% is still high, as
shown by the robust sales reported by some property developers recently.
     Property sales revenue jumped 12.7% to CNY11.5481 trillion in the first 11
months, with growth accelerating 0.1 percentage point from the first ten months,
showing the effect of higher housing prices even though unit sales decelerated. 
     Stocks of unsold properties fell in line with local government campaigns to
reduce inventories. At the end of November, inventories stood at 596.06 million
square meters, 6.53 million square meters less than at the end of October. The
largest reduction was in residential unit inventories, which fell 6.51 million
square meters. Stocks of office space fell 80,000 square meters while
inventories of business operations space fell by 20,000 square meters.
     Despite lower investment and sales, property developers remain upbeat about
the property market outlook in China. 
     The NBS data show housing starts accelerated to 1.61679 billion square
meters in the first 11 months, with the growth rate rising 1.3 percentage points
to 6.9%. 
     The data also show property developers continued to aggressively expand
their land acquisitions.
     Property developers acquired 221.58 million square meters of land in the
first 11 months, up 16.3% y/y, 3.4 percentage points higher than in the first
ten months. Land acquisitions in terms of value rose to CNY1.1436 trillion, a
jump of 47%, 3.7 percentage points higher than in the January-October period.
     Zhang Dawei, chief analyst at Centaline Property, said developers are
accelerating their acquisitions of land to make up for the recent rapid
reduction of inventories. E-house's Yan told MNI that local governments stepped
up their offers of land for sale at the end of the year as the central
government allocated specific land sales targets for local governments to help
lower home price growth.
     Property developers' financing improved, with funds available to them
rising 7.7% in the first eleven months, 0.3 percentage point higher than in
     Developers' funding from foreign sources grew to CNY14.7 billion, with the
growth rate accelerating 10.1% percentage points to 11.7%. Self-raised funds
rose 2.7%, 1.9 percentage points higher than in January-October, due mainly to
15% growth of deposit and down payment money from home purchasers. Yan said
property companies sped up capital inflows by various means, in particular
benefitting from more home purchasers buying homes in all-cash deals. The growth
of property companies' funding from domestic loans slowed 2.2 percentage points
to a still-high 18% rate. 
     The latest relatively robust data show property developers are still
positive about the outlook for the property sector in China, Yan told MNI. He
predicted investment growth would remain around 7% in the January-December
period, which would not be a big change from the first 11 months. 
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI BEIJING Bureau; +1 202-371-2121; email:
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