China property investment remains weak

BEIJING - Investment in China's property sector continued to slow in the first 11 months of 2015, official data showed Saturday, adding to worries of an economic slowdown.

Real estate investment rose just 1.3 percent year on year, compared with the 2 percent growth for the Jan-Oct period, the National Bureau of Statistics (NBS) said.

Investment in residential housing, which accounts for about two-thirds of total property investment, edged up 0.7 percent from a year earlier, compared with a growth of 1.3 percent in the first 10 months.

New housing construction dropped 14.7 percent year on year in the Jan-Nov period, compared with the 13.9 percent decrease for the first 10 months.

Construction of new residential houses, in floor space terms, plunged by 15.3 percent.

On the same basis, sales of residential property went up 7.4 percent year on year, 0.2 percentage points higher than that recorded in the Jan.-Oct. period, according to the NBS.

Its figures also showed the land area purchased by property developers slumped 33.1 percent year on year in the first 11 months.

However, funding growth for property developers continued to rise,posting an increase of 2.2 percent, from the 1.3 percent rise for the Jan.-Oct. period.

Overall, the Chinese property market remained sluggish in 2015 due to weak demand and a supply glut, prompting authorities to take easing measures, including interest rate cuts, reducing down payments and scrapping home-purchase restrictions.

As a result of support policies, property sales in top-tier cities and some second-tier ones have recovered, but the cooling continued in others, especially third-tier cities where a previous market boom led to serious oversupply.

The property sector is still faced with great pressure to destock. Unsold homes nationwide hit a record 686.3 million square meters at the end of October, up 17.8 percent from a year earlier, according to official figures.

Wang Tao, a UBS economist, called a more prolonged property destocking process "the biggest downside risk" for China's growth.

The knock-on effect of a property construction downshift would continue to spread through the rest of the Chinese economy for the next two years, dampening demand for commodities and machinery, Wang said in a research note last month.