China home sales expand slowly after housing speculation curbed

NEW home sales in China continued to expand — albeit at a slower pace — in the first eight months of this year, data released today by the National Bureau of Statistics showed.

About 6.515 trillion yuan (US$992 billion) in new homes, excluding government-subsidized affordable housing, were sold between January and August, a year-on-year increase of 14.2 percent, the bureau said in a statement posted on its website. The pace was slower than the 15.9 percent hike registered in the first seven months.

The area of new homes sold in the eight-month period climbed 10.3 percent from a year earlier to 854.5 million square meters, also down from an 11.5 percent growth in the first seven months, the bureau's data showed.

"It is no surprise to see a continuously decelerating pace as buying momentum remained rather weak in August, which is a traditionally slow season for property sales in China mainly due to the hot weather," said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. "The double-digit increase in the first eight months from the same period a year ago was mainly fuelled by comparatively robust sales in third- and fourth-tier cities."

In terms of national inventory, about 331.9 million square meters of new residential properties were available for sale across the country as of the end of August, down from 341.8 million square meters at the end of July, according to the bureau.

Investment in residential development, which took up 68.3 percent of total real estate investment in the first eight months, climbed 10.1 percent year on year to 4.74 trillion yuan, up 0.1 percentage points from the first seven months.

Strictly enforced curbs to quell housing speculation, including widely implemented stricter home purchase limits, higher down payment requirements and mortgage rates, as well as a lockup period for home sales in a couple of cities, has caused property sales to slow across the country this year.