Home prices continued to surge in China last month. Photo: Reuters

Property investment and sales speed up in China in 2013

Growth in real estate investment and property sales accelerated in China last year, a sign the booming property market has resisted Beijing’s sustained efforts to cool it down.

Real estate investment, which accounted for 15 per cent of China’s gross domestic product last year, rose 19.8 per cent from a year earlier, compared with 16.2 per cent in 2012, the National Bureau of Statistics said on Monday.

Property sales rose 17.3 per cent in terms of floor space and 26.3 per cent in terms of value, the agency said in a statement on its website,

That compared with annual increases of 1.8 per cent in floor space and 10 per cent in value in 2012.

China’s property sector is one of the few bright spots in a slowing economy, and the government has tried to tread a fine line between reining in rising property prices that threaten affordability for average wage earners and stifling economic growth elsewhere.

“Property investment has been one of the main drivers of the stabilising economy since the third quarter of last year,” said Shen Jianguang, chief China economist with Mizuho Securities in Hong Kong.

Analysts said buoyant sales have enabled developers to quicken their pace of expansion, which helped hold up property investment throughout the year. Government efforts to build more affordable housing also contributed to investment growth.

The NBS data also showed that construction starts rose 13.5 per cent last year, quicker than an increase of 11.5 per cent in the January-November period.

Still, data for December alone showed signs of stabilisation in the property market, with property sales up only 0.7 per cent in that month in terms of floor space from a year earlier, according to Reuters calculations based on NBS data.

That compared with an annual increase of 14.8 per cent in November, though the month-alone data, derived from cumulative figures, is volatile.

Meanwhile, total land area bought by developers rose 8.8 per cent last year from a year earlier, easing from an increase of 9.9 per cent in the first 11 months.

Separate data on Saturday showed that prices of new homes in China continued to surge last month, though the pace of gains overall did not exceed the previous month’s and rises eased in some major cities, suggesting that government tightening measures may be starting to bite.