China Construction Slows, in Potential Sign of Turn in Property

  • Construction sector output rose 6% on year in third quarter
  • Real estate services led growth while financial sector lagged

China’s construction growth slowed in the third quarter, signaling that developers might have turned more cautious toward a property market seen at risk of becoming a bubble.

Construction output rose 6 percent from a year earlier in the quarter, the National Bureau of Statistics said Thursday. That was down from 7.3 percent in the second quarter, and marked a second straight period of slower growth.

Buyers remained bullish, though. Real estate services grew 8.8 percent in the July-to-September period.

The property market, a pillar of the world’s second-biggest economy, helped propel gross domestic product growth of 6.7 percent during the quarter. But fears of overheating in the property sector led at least 21 cities to introduce purchase restrictions and toughen mortgage lending since late September. The curbs are aimed at cooling speculation without triggering a potentially destabilizing reversal.

Completed investment in real estate development rose 5.8 percent during the first nine months of the year, Wednesday’s data showed, while sales jumped 41.3 percent during the period.

Data from September shows that developers may be responding more recently to an upsurge in buying. New construction starts, a leading indicator, rose 14 percent in September from a month earlier, the fastest pace since April to according to Bloomberg calculations based on official data released Wednesday.

— With assistance by Xiaoqing Pi

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