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Property sector slows as credit curbs bite

(Xinhua)
Updated: 2008-08-18 16:23

BEIJING - Property investment has slowed in China since mid-year, both in value and land area, amid tighter credit and buyers' uncertainty, official statistics released on Monday show.

The National Bureau of Statistics (NBS) said that between January and July, investment in real estate development totaled 1.588 trillion yuan (US$231.55 billion), up 30.9 percent year-on-year. However, the rate of increase was 2.6 percentage points less than the first-half level.

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Spending on residential projects was 1.149 trillion yuan, up 33.7 percent but 2.8 percentage points lower than in the first half alone.

The total included 45.9 billion yuan in low-income housing, up 25.2 percent but 6 percentage points less than in the first half.

In the first seven months, 148 million square meters of land went under development, up 4.2 percent year-on-year. However, the growth rate was 5.7 percentage points lower than in the first half.

About 2.229 billion sq m of housing were under construction during the January-July period, up 22.5 percent. Yet again, the growth rate slowed from the first half, by 1.6 percentage points.

Previously, the central bank has reported that first-half lending to real estate developers and home buyers was 398.84 billion yuan, down 170.66 billion yuan from a year earlier.

Since the end of September, when China tightened credit for those buying more than one apartment, demand has ebbed. Additionally, price falls in some cities have made prospective buyers wary.

Developers sold about 260 million sq m of housing in the first six months with a value of 1 trillion yuan, representing decreases of 7.2 percent and 3 percent year-on-year, respectively.

The NBS also said that between January and July, 129 million sq m of commercial property was vacant, up 6.1 percent. This was one of the few cases where the growth rate rose from the first half; in this case, by 3.9 percentage points.