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China's property investment up 10.4% in Q1
CHINA'S real estate investment posted its fastest year-to-date growth in three years and new construction accelerated in the first quarter, but property sales slowed as borrowing costs rose and demand appeared to soften.
Property investment grew 10.4 per cent in January-March from the same period a year earlier, compared with a 9.9 per cent rise in the first two months, data from the National Bureau of Statistics (NBS) showed on Tuesday.
This matched the year-to-date growth seen in the January-February 2015 period.
Real estate directly affects 40 other business sectors in China and is a major driver for the economy. But a boom since 2016 has raised bubble concerns and prompted a flurry of government measures to tame soaring home prices.
Chinese policymakers are seeking to engineer a soft landing without roiling the economy as a sharp decline in prices and investment would weigh on industrial activity and dampen consumer confidence.
The investment number mainly focuses on residential real estate but also includes commercial and office space.
For March alone, property investment grew a robust 10.8 per cent from same period last year, according to Reuters calculations based on official data.
The solid property activity appeared to support broader growth in the first quarter.
China's economy grew 6.8 per cent in the first quarter from a year earlier, slightly above expectations in a Reuters poll and unchanged from the previous quarter.
New construction starts measured by floor area, a gauge of developers' confidence, were up 9.7 per cent year-on-year in the first quarter, after slowing to 2.9 per cent in January-February, the NBS data showed.
Property investment is estimated to grow 5 per cent in the full year of 2018 as tight supply and government policies that promote real estate in smaller cities are seen keeping the market relatively buoyant despite other cooling measures, a Reuters poll showed.
Investment growth is also likely to be further cushioned by a rush to build rental apartments as major Chinese developers respond to President Xi Jinping's call for more rental supply to address people's housing demand as affordability fades.
However, tightening measures are expected to be gradually extended to smaller cities seen at risk of overheating.
Property sales by floor area rose by 3.6 per cent in January-March from a year ago, easing from a 4.1 per cent gain in the first two months of the year. In March alone, property sales rose 3.2 per cent. REUTERS