Real estate investment growth in China will slow next year from 2011 because of a correction in the property market, said Qin Hong, head of the policy research center under the Ministry of Housing and Urban-Rural Development.
“Massive” spending for public housing projects in 2012 and 2013 won’t be enough to make up for a slowdown in construction of commercial residential property, Qin told reporters at a conference in Beijing today. Forecasts for zero growth or a decline in investment next year would be “too pessimistic,” Qin said.
Slowing property investment prompted by China’s campaign to rein in home prices with mortgages and purchase restrictions would also limit cement, steel and power demand and reduce economic growth, according to economists including Nomura Holdings Inc.’s Zhang Zhiwei.
Vice Premier Li Keqiang said this month that the curbs imposed to prevent a property bubble and boost affordability should be maintained after home prices in October fell in 33 of 70 cities monitored by the government.