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Investment in property takes a dip

INVESTMENT in real estate development fell in Shanghai in the first five months of this year after a plunge last month dragged it to a negative growth.

Between January and last month, 50 billion yuan (US$7.32 billion) were invested in real estate development in the city, a year-on-year decline of 2.7 percent, the Shanghai Statistics Bureau said yesterday. In the first four months, about 42 billion yuan were invested in the sector which notched a 1.8 percent growth year on year.

The city attracted about 8 billion yuan in real estate investment last month, down from 10.2 billion yuan in May last year. No reason was given for the decline.

Over the five months, investment in housing development fell 13.4 percent to 27.78 billion yuan, against a 10.1 percent drop to 23.6 billion yuan between January and April, the bureau said.

Also during the five-month period, a total of 8.18 million square meters of properties began construction in the city, an annual drop of 16.2 percent. In the same period, about 6.24 million square meters of properties were completed, a decline of 8.5 percent from the same period a year ago.

However, the sales momentum continued to rise.

Sales of new properties, including homes, commercial, and industrial, hit 11.72 million square meters across the city in the five months, a year-on-year jump of 19.6 percent. The bulk of the transactions was in new homes, which soared 26.5 percent from the same period a year earlier to 10.65 million square meters.

Analysts forecast the sales boom to widen over the coming weeks - similar to the record last month when a total of more than 2 million square meters of new homes changed hands.

"Sales of new homes, excluding those meant for relocated residents due to urban redevelopment projects, already exceeded 1 million square meters in the first two weeks of June," said Xue Jianxiong, an analyst of E-House (China) Holdings Ltd.


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