Property market still recovering, despite curbing policies

Real estate investment accelerated year-on-year in the first four months of the year, with property sales also rising, official data showed Monday, indicating continuing recovery in the property market.

Real estate investment rose by 21.1 percent in the first four months of 2013 compared to the same period last year, up 0.9 percentage points from the first three months, the National Bureau of Statistics (NBS) said.

Revenues from property sales rose by 59.8 percent year-on-year during the same period, a slight drop of 1.5 percentage points from the first quarter, the NBS said.

"The property market continued to improve in April due to loose monetary policies that enabled first-home buyers to get preferential mortgage interest rates, as well as a moderate recovery in the economy that boosted the confidence of developers," Gu Yunchang, deputy head of the China Real Estate and Housing Research Association, told the Global Times.

Total new loans reached 792.9 billion yuan ($127.85 billion) in April, up 111.1 billion yuan year-on-year, the country's central bank said Friday.

M2, a broad measure of money supply, rose 16.1 percent year-on-year to 103.26 trillion yuan at the end of April, up from the end of March and the end of 2012 by 0.4 and 3.3 percentage points, respectively, the data showed.

"Property sales were bound to decline in April after peaking in March, as home buyers rushed into the market to close deals due to concerns over higher costs after the issuance of new government curbing measures," Zhang Haiqing, director of Centaline Property Research Center in Shanghai, told the Global Times.

"Although the growth rate in revenues from property sales declined in April, they are still at a high level," Zhang said.

The central government announced on March 1 that it would introduce a new capital gains tax of 20 percent on profits from secondhand home sales, along with higher down-payments and mortgages for buyers of second properties.

"The data shows that the new control measures have failed to deliver results," Hui Jianqiang, head of research at Shanghai-based E-house China Research and Development Institute, told the Global Times.