China's property investment up 8.5% in Q1

BEIJING - Investment in China's property sector rose 8.5 percent year on year to 1.67 trillion yuan ($271 billion) in the first three months of 2015, the National Bureau of Statistics announced Wednesday.

The figure dropped from a 10.4 percent-increase seen in Jan-Feb,suggesting continued weakness in the sector.

In Q1, investment in residential housing posted an increase of 5.9 percent from the same period last year to 1.12 trillion yuan.

New housing construction stood at 5.8 billion square meters in Q1, up 6.8 percent from a year earlier.

Sales of commercial housing fell 9.2 percent year on year to 182.5 million square meters in Q1.

Bob Liu, an analyst with the China International Capital Corp, said that the weak economic data will prompt more policy easing and the broad economy is expected to improve in the second and third quarters.

He added the latest moves to relax property curbs will boost property investment and promote steady development of the housing market.

China's property market took a downturn in 2014 under the accumulative effects of measures to curb the previously red-hot sector. The cooling trend has continued into 2015, with both sales and prices falling, and investment slowing.

To lift the sagging housing market, the central government announced a cut to the minimum down payment requirement for second home buyers at the end of March, shifting to 40 percent from 60 to 70 percent.

Minimum down payments for first and second home purchases using the housing provident fund, which offers urban residents lower rates than those of commercial banks, were also lowered.

Meanwhile, the Ministry of Finance announced that sales of homes purchased more than two years ago will be exempt from business tax. Previously, the exemption was just for homes bought more than five years ago.