China June Home Sales Rise 24% as Buyers Defy Property Curbs
China’s home sales transaction value rose 24 percent in June from the previous month, the biggest monthly gain this year, signaling that the government’s latest property measures are failing to deter buyers.
The value of homes sold climbed to 624.4 billion yuan ($102 billion) last month from 503 billion yuan in May, based on the difference between the National Statistics Bureau’s data for the first half of the year and the first five months. The June value was almost the same value of the sales in the first two months of the year combined. Housing sales in the first six months rose 46 percent to 2.82 trillion yuan from a year earlier, according to the data.
China stepped up a three-year campaign to cool home prices in March, with the capital city of Beijing among 35 provincial-level cities issued the toughest measures. The strong growth of home sales may not be sustained in the second half of the year as the country’s economy slows and liquidity squeezed, said Johnson Hu, a Hong Kong-based property analyst at CIMB-GK Securities Research.
“The credit tightening will have some impact on developers in the second half because a longer approval period for mortgage or development loans will hit home sales,” said Hu in a telephone interview.
China’s economic growth slowed to 7.5 percent in the second quarter from last year, the government’s data showed today, while M2 money supply rose 14 percent in June, down from 15.8 percent the previous month, People’s Bank of China numbers showed in Beijing on July 12.
Investments in homes, office buildings, malls and other real estate gained 20 percent to 3.68 trillion yuan in the first half, compared with a 17 percent gain a year earlier, according to the statistics bureau data announced at a press conference in Beijing today. New property construction rose 3.8 percent to 959 million square meters (10.3 billion square feet).
“We still face fairly big pressure to tighten the property market, and we should further tighten it according to the regulations of the State Council,” said Sheng Laiyun, the bureau’s spokesman at a press conference in Beijing today.
Home sales volume rose 30 percent in the first half from last year to 460.9 million square meters, the government data showed today. Property sales value including office buildings and retail space rose 43 percent to 3.34 trillion yuan from a year ago.
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