The FINANCIAL -- China's housing sales in the first half of the year rose 12.9% year-over-year, rising from the 5.1% gain recorded in the first five months as lower borrowing costs, earlier gains in the stock market and relaxed mortgage requirements whet appetite for home purchases, according to Nasdaq.
Housing sales in January to June totaled 2.89 trillion yuan ($466 billion), the National Bureau of Statistics said Wednesday. Last month, the central bank lowered benchmark interest rates for the fourth time in seven months and reduced the amount of reserves banks have to set aside at the same time, after Chinese stocks saw their biggest one-day fall in several years. Beijing is looking to stimulate the economy and such cuts would help to lower borrowing costs for homebuyers and developers. Central and local governments have also rolled out more accommodative measures to boost housing sales.
Still, the value of investment in property development rose 4.6% to 4.40 trillion yuan in the first six months this year, moderating from 5.1% growth in the first five months. Property investment includes land purchases and other investments by developers. An oversupply of apartments in smaller Chinese cities has compelled builders to slow down expansion plans and halt ongoing projects, and policymakers have looked to speed up approvals of infrastructure projects to take up the slack from the commercial and residential property markets.
While sales momentum has picked up in first-tier cities such as Beijing and Shanghai, building starts and investment in real estate nationwide are likely to remain weak as developers focus on cutting inventory. New construction starts across residential and commercial property in the first half fell 15.8% to 674.79 million square meters, compared with the 16% decline recorded in the January to May period.