Chinese real estate shows strong growth

BEIJING, April 13 – China’s real estate investment grew 4.1 per cent in the first quarter from a year earlier, the National Bureau of Statistics said on Monday, suggesting a significant pickup in capital spending in the sector in March.
Property investment in urban areas grew just 1.0 per cent in January and February from a year earlier, meaning the growth in March would have to have been much stronger in order to bring the figure for the full quarter up to 4.1 per cent.
Property investment was one of the biggest drags on overall urban fixed-asset investment in the first two months, which was lifted by a surge in government spending on infrastructure.
Economists polled by Reuters expect annual fixed-investment growth to remain steady for the first three months at 26.5 per cent, equal to the pace in January-February. The data are due to be released on Thursday.
While investment in real estate apparently picked up in March, other signs suggest continued weakness in the sector.
The property outlook index issued by the statistics agency fell to a record low 94.74 points in March, showing a continued decline in the conditions facing the sector.
The index, which distils trends in investment, prices, and supply-demand relation into a composite figure representing the sector’s overall health, has been falling since the end of 2007 and has been below the watershed mark of 100 points, indicating worsening conditions, since October.
Urban property prices fell by 1.3 per cent in March from a year earlier, the steepest rate since official records began in 2005, the statistics agency added.
That marked an acceleration from a 1.2 per cent annual fall in February and was the fourth straight month of year-on-year declines.