China’s property market has surged in recent years. After prices jumped 25 per cent in 2009 alone, the central government imposed austerity measures, including lending curbs, higher mortgage rates and restrictions on the number of homes each family can buy.
China property investment slips 12.5pc in second quarter
Trend counteracted by a surge in interest in buying prime commercial properties
Investment in mainland property fell 12.5 per cent to US$24.9 billion in the second quarter, dragged lower by a fall in land sales, a growing difficulty in sourcing capital and a slowdown in the economy, according to property consultancy DTZ.
But the decline in land sales compared with the previous quarter was counteracted by a surge of interest in acquiring prime commercial properties, DTZ noted.
Total land transactions dropped 15.7 per cent quarter-on-quarter to US$22.83 billion, but total sales of completed properties rose by 47.9 per cent to US$2.11 billion.
All properties sold in the second quarter were in Beijing or Shanghai.
"Clearly, investors are increasingly attracted to investment opportunities provided by acquisition of core commercial assets, permitting them to reduce risk by achieving the security of immediate rental returns," it said.
Investment in residential land slowed in the quarter, with the total value of transactions dropping 9.2 per cent quarter-on-quarter to US$10.17 billion.
The total transaction value for development sites earmarked for mixed-use purposes was US$7.72 billion, down 17.4 per cent quarter-on-quarter, while industrial land investment declined 49.4 per cent to US$534 million.
Another property firm, Colliers, remains upbeat about mainland property investment.
"The total investment volume is forecast to pick up in the short term. Interest in acquiring prime commercial properties will remain keen, while developers continue to actively replenish land banks in light of the still positive conditions in the residential market," it said.