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May 16, 2019

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New home sales up 10.6% to extend streak

New home sales continued to pick up in China amid improving sentiment among buyers, according to figures released by the National Bureau of Statistics yesterday.

Between January and April, about 3.4 trillion yuan (US$490 billion) worth of new homes, excluding government-subsidized affordable housing, were sold across the country, an increase of 10.6 percent from the same period a year ago.

The area of new homes sold in the first four months totaled 368 million square meters, a growth of 0.4 percent from a year earlier. That, however, compares with an annual slip of 0.6 percent registered in the first quarter.

New construction starts measured by floor area rose 15.5 percent in April from a year earlier, compared with an 18.1 percent gain in the preceding month, Reuters calculated based on NBS data.

“With recovering momentum among real estate developers as well as generally improved liquidity in the market, more home seekers around the country decided not to sit on the sidelines any more amid an increase in new supply,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co.

Property investment in China was resilient in April. Real estate investment is a key driver of growth in the world’s second-largest economy.

China’s real estate investment, which mainly focuses on the residential sector but also includes commercial and office space, rose 12 percent in April from a year earlier, unchanged from the growth in March, according to Reuters calculation.

For the first four months, property investment grew 11.9 percent on year, compared with a 10.3 percent gain in the same period a year earlier.

Investment in residential property development, which represented 72.8 percent of total real estate investment, rose 16.8 percent year on year to 2.5 trillion yuan between January and April.

Funds raised by China’s real estate developers in the first four months grew 8.9 percent from the same period a year earlier, a notable improvement from a 5.9 percent increase in the first three months.

On the inventory side, newly built homes available for sale as of the end of April stood at 243 million square meters, down 14.7 percent from a year earlier. That compares with 247 million square meters recorded as of the end of March.

China’s land market has recovered under looser credit conditions this year and the premiums developers pay for land rebounded sharply in the first quarter of 2019.

That contrasts with a slew of failed land auctions in the second half of last year, which followed a government campaign to rein-in hot property prices.


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