BEIJING (Reuters) – Growth in property investment in China cooled to the second slowest pace in 2018 in December, adding to signs of a further slackening in the real estate market in a blow to a key driver economic growth.
An uncompleted building is seen next to the Fourth Ring Road in Beijing, China July 16, 2018. REUTERS/Jason Lee
Real estate investment, which mainly focuses on the residential sector but includes commercial and office space, rose 8.2 percent in December from a year earlier, down from 9.3 percent in November, according to Reuters calculations based on data released by National Bureau of Statistics (NBS) on Monday.
That was just ahead of the slowest pace of growth last year at 7.7 percent recorded for October.
For the full year, property investment increased 9.5 percent from the year-earlier period, down from 9.7 percent in January-November.
In December, property sales by floor area, a major indicator of demand, rose a touch by 0.9 percent from a year earlier, the first gain in four months and compared with November’s 5.1 percent drop.
For 2018, property sales by area rose a modest 1.3 percent from a year earlier, official data showed.
Analysts say a continued downturn in sales on the back of tight government controls to curb speculation could add to the growing pressure on the world’s second-largest economy.
The real estate sector is a key pillar of the economy, so any further weakness in sales could influence the pace and scope of fresh stimulus measures expected from Beijing this year.
Analysts predict the softer sales will constrain price growth in coming months, dampening developers’ appetite for front-loading construction.
Funds raised by China’s property developers grew 6.4 percent in 2018 on an annual basis. That was slower from the pace of 7.6 percent in the first eleven months, according to the statistics bureau.
Measured by floor area, construction starts surged 20.5 percent from a year earlier, down from 21.7 percent in November, according to Reuters calculations.
Reporting by Yawen Chen, Stella Qiu and Ryan Woo; Editing by Shri Navaratnam