China’s home sales fell in the first two months of the year as local government property measures to rein in rising prices weakened buyer sentiment.
The value of homes sold fell 5 percent to 598.5 billion yuan ($97.5 billion) from the same two months a year earlier, the National Bureau of Statistics said today. That compared with an almost doubling in sales in the first two months of 2013. The government doesn’t provide data for individual months and releases a compounded figure throughout the year.
“The bad figures from the property sector are sending the government an alarm that it will somehow need to relax restrictions on the sector,” said Jack Gong, a Hong Kong-based property analyst at Orient Finance. “The economy is slowing down obviously and property is intertwined with so many other industries.”
Premier Li Keqiang said today there’s some flexibility around the nation’s target of 7.5 percent growth this year, without specifying how much of a slowdown leaders would tolerate. The government will curb demand for housing among investors and will regulate the housing market “differently in different cities,” Li said at a press conference in Beijing.
At least 10 Chinese cities stepped up measures to calm local property markets at the end of last year.
Investment in homes, office buildings, malls and other types of real estate climbed 19 percent to 795.6 billion yuan in the first two months, according to the statistics bureau. New property construction fell 27 percent to 166.9 million square meters (1.8 billion square feet).
Home sales volume fell 1.2 percent in the January-February period to 93.8 million square meters from the same period a year earlier, the government data showed today. Property sales value including office buildings and retail space dropped 3.7 percent to 709 billion yuan from a year ago.
Shanghai Stock Exchange Property Index rose 0.6 percent, the smallest gain among the five industry groups on the benchmark, which rose 1.1 percent at the close of trading.