REPEAT:MNI:China Oct Prop Sales/Growth Slow On Mkt Clampdown

Repeats Story Initially Transmitted at 06:50 GMT Nov 14/01:50 EST Nov 14

--Developers Still Upbeat On Future

     BEIJING (MNI) - Growth in property investment and sales continued to slow

in October amid the Chinese government's clampdown on speculation in the sector

and its hunt for a "long-term effective property system," although property

developers were still positive on the outlook for the sector. 

     In the first 10 months, property investment saw its lowest growth since the

year-to-date figure in December last year -- rising 7.8% on an annualized basis,

0.3 percentage point lower than the first nine months, data released by the

National Bureau of Statistics on Tuesday showed. 

     Property sales also continued to slow on the government's curbs to control

skyrocketing housing prices. Sales measured by area grew 8.2% in the

January-October period to 1.30254 billion square meters, compared with 10.3%

growth in the January-September period.

     Sales of residential property, office buildings and business property units

rose 5.6%, 28.2% and 21.4% in the January-October period, a deceleration of 2,

4.5 and 2.3 percentage points from the January-September period.

     Property sales in terms of revenue in the January-October period grew 12.6%

to CNY10.299 trillion, a drop of 2 percentage points compared with the

January-September period. It was led lower by 1.8, 5, and 4.2 percentage point

sales decelerations in residential property, office buildings and property units

for commercial operations.

     China International Capital Corporation said in a note published Tuesday

that despite the downward trend of property sales, investment momentum by

developers into the sector would continue on their strong hunger for land

acquisitions. 

     Yan Yuejin, director of the research department at E-house Real Estate

Research Institute, said in a note Tuesday that recent government policies to

advance development of the low-income housing and rental sectors had helped

support developers' land acquisitions. 

     Land acquisitions have been heating up for months despite the government's

policy-tightening moves. From January to October, property developers acquired

190.48 million square meters, a 12.9% y/y gain and 0.7 percentage point higher

than growth in the first nine months.

     Yan said property developers tend to be enthusiastic and positive about

investment and property sales prospects for the next two years. He also noted

that growth in land acquisitions was mainly buoyed by strong land sales in

Tier-3 and Tier-4 cities, which are benefiting from the spillover effect from

Tier-1 and Tier-2 cities.

     The Chinese government started a new round of policy tightening in the

property sector in March, with Tier-1 and Tier-2 cities facing the strictest

curbs due to their quicker growth and higher prices.

     The continuing drop in property inventories has also boosted developers'

confidence. As of the end of October, property inventories were down 8.82

million square meters to 602.58 million square meters compared with the end of

September, with most of the reduction coming in residential units.

     NBS spokesperson Liu Aihua said at a press conference on Tuesday that

property inventories dropped more than 10% in October, and she stressed that the

government is working to develop a "long-term effective property system,"

whereby investment in low-income housing and in the rental housing sector would

continue to support growth in the sector. 

     But property developers are still facing challenges as the Chinese

government tightens control over credit flowing to the sector, as banks limit

loans to property companies and home purchasers, and as mortgage rates rise. NBS

data showed that funds available to property developers grew 7.4% to CNY12.5941

trillion in the first 10 months, a decrease of 0.6 percentage point from the

first nine months.

     Housing starts grew 5.6% to 1.45127 billion square meters in the

January-October period, 1.2 percentage points lower than the January-September

period.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com