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REPEAT: MNI: China Property Market To Continue Robust Growth

MNI (London)
Repeats Story Initially Transmitted at 08:24 GMT Mar 14/04:24 EST Mar 14
--Despite Curbs, Underlying Demand To Underpin Sales
By Iris Ouyang
     BEIJING (MNI) - China's property market continued to cool in the first two
months of 2018 on government measures to curb a property bubble, but investment
is expected to extend its strong momentum with policy housing seen supporting
much better-than-expected property investment.
     National Bureau of Statistics data released Wednesday showed various
property statistics slowing, compared with an acceleration of property
investment growth.
     From January to February, property sales in terms of area slowed 3.6
percentage points to 4.1% from the 7.7% average growth in the whole year of last
year. The January-February growth was the lowest in more than two years.
     The deceleration reflected the Chinese government's tighter controls on the
property market since late 2016 in an attempt to rein in surging housing prices
and curb potential risks the overheating sector could bring to the whole
economy.
     --GROWTH DESPITE HURDLES
     Though sales slowed, the 4.1% growth was still not negligible considering
such a tight policy environment -- at least 180 property policies were issued in
2017 and so far this year more than 50 new policies have been announced.
     Although demand is suppressed somewhat by housing purchase quotas set by
the government, purchasing a house remains a national obsession, either for
newlyweds or the cash rich looking for an investment. Pent-up demand for a
switch to a bigger home is expected to continue supporting sales.
     Government-led shanty-town renovation, will also continue to buoy the
property market, especially investment.
     As shown in the NBS data, property investment climbed by 2.9 percentage
points to 9.9% growth over the average level of 2017. An acceleration of 2.9
percentage points in residential house building boosted the investment gain.
     But housing starts decelerated 4.1 percentage points, land sales dropped
1.2%, and property developers' funding edged down by 3.4 percentage points,
underlining the skeptical attitude of property developers.
     --REGENERATION FUNDS
     The Chinese government has vowed to renovate shanty town housing since
2009, a pet project led by Premier Li Keqiang to renovate urban and rural
housing, improving living conditions for low-income families.
     In recent years, instead of offering a new accommodation when houses were
torn down for such projects, the government increasingly gives cash to these
families. They usually then turn to buying a property unit from developers,
further increasing property sales.
     Premier Li announced at the start of the annual National People's Congress
that China will start another "three-year shanty-town renovation plan," with a
further 5.8 million houses set to be built under the project.
     With the government's campaign to develop its rental property market,
growth of the property sector, even if appearing to have slowed on first sight,
is unlikely to be truly tempered.
     As NBS Spokesman Mao Shengyong told the press earlier Wednesday, going
forward "property investment will extend relatively stable growth."
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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