Graphics/GT
China's property sector saw a strong rebound in investment in the first two months of the year, as land supply increased and real estate sales further surged, according to official data released on Tuesday.
These developments, which came after many local governments have acted to curb property prices, show that the restrictions have had an effect and improve the prospects for further curbing prices, experts noted.
Real estate investment rose 8.9 percent year-on-year in the first two months of 2017 to 985.4 billion yuan ($142.54 billion), data from the National Bureau of Statistics (NBS) showed. The pace represents a fast rebound compared with 6.9 percent growth in all of 2016.
Wang Baobin, a statistician with the NBS, attributed the surge to continuous positive momentum in sales, particularly in third- and fourth-tier cities that are pursuing "destocking measures."
Sales by area rose 25.1 percent year-on-year, up 2.6 percentage points from the pace in the full year of 2016, the NBS data showed. Sales in central and western regions, where most cities faced oversupply, rose more than 33 percent, according to the NBS.
The surge in these smaller cities may explain the rapid national growth in the face of buying curbs, according to Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute.
"In third- and fourth-tier cities, due to the effectiveness of the destocking strategies, overall sales saw fast growth and lifted the national market," Yan said in a note sent to the Global Times on Tuesday.
Last year, rising prices prompted the first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen in South China Guangdong Province), as well as dozens of other cities, to introduce buying curbs.
Among 15 of those cities, 11 saw house prices slide, three saw unchanged prices and one recorded a slower pace of growth, Sheng Laiyun, spokesman of the NBS, said at a press conference in Beijing on Tuesday.
Land purchases for real estate development might have also contributed to the surge in investment, experts noted.
By area, land purchased by developers increased 6.2 percent year-on-year, compared with a 3.4 percent decline for the full year of 2016, according to the NBS.
As part of the its efforts to maintain stability in the housing market, the central government started in the second half of last year to ease restrictions on land supply.
The increase in real estate investment "also indicates that land acquired last year has gone into the construction phrase," Wang said in a statement on the NBS website on Tuesday.
Real estate investment will grow steadily and support stable economic development, Sheng said.
The trend will continue despite some fluctuations in the data of February, which achieved one of the goals of regulation in the real estate sector, he added.
Yan also said the surge in investment set the stage for falling inventory in third- and fourth-tier cities as well as curbing overheating prices in first- and second-tier cities.
"There will be a large number of real estate transactions this year, but if prices keep rising, the possibility of tightened measures in third- and fourth-tier cities can't be ruled out," he added.
