[BEIJING] China's real estate investment in the first half eased to its slowest since 2009, pointing to persistent weakness, even as sales improved on government measures to support the sector.
Property investment, a main driver of the economy, grew 4.6 per cent in the first half of 2015 from a year earlier, marking the slowest rate since the March quarter of 2009, data from the National Bureau of Statistics (NBS) showed on Wednesday.
A prolonged slowdown in the property market has weighed on the broader economy, which grew 7 per cent in the second quarter of this year, according to other data released on Wednesday.
Economists believe that weak property investment, as an important part of the overall investment, will continue to pose one of the main risks to China's economy until its high inventories of unsold homes are cleared. "The investment poses the biggest challenge to the economic recovery in the second half of this year as the current fiscal policy has not helped to improve the situation too much," said Ye Bingnan, an analyst in BOC International in Beijing.
The unsold floor space totalled 657.4 million square metres by the end of June, up 20.8 per cent from the same period a year ago, NBS data showed.
Still, while real estate investment is expected to remain weak this year, sales volume data could suggest the market may be bottoming out.
The floor area of property sold rose 3.9 per cent during the January-June period, reversing a 0.2 per cent decline in January to May, the NBS data showed.
In June alone, property sales measured by floor space rose 16 per cent from a year earlier, marking the third consecutive month of positive growth, according to Reuters calculations. The figure compared with a 15 per cent rise in May.
To lift the struggling property market, Beijing relaxed tax rules and cut downpayments for second home buyers in late March.
The central bank has already cut lending rates four times in six months and reduced the amount of cash that banks must hold as reserves to bolster economic activity.