Home Property Investment Slows Down as Sales Drop Further

Home Property Investment Slows Down as Sales Drop FurtherFor the first two months of the year China real estate investment has slowed down and sales dropped compared a year earlier. Which showed signs of the cooling down of the property market as a broader economy slows down as well.

Investment in the real estate market affected 40 sectors ranging from cement, steel and furniture market which pushed it and saw an increase of around 19 percent from January to February compared to the same period last year, which is slower as it saw a 19.8 percent annual growth in 2013. Property sales based on floor sales decreased by 0.1 percent and fell 3.7 percent based on value in the first two months. Compared that with the increase of 17.3 percent based on floor space and 26.3 percent by value.

Floor space that was set aside for construction slumped down 27 percent compared to the growth of 13 percent for the first two months of 2013.  This show that the property market in China is now showing signs of losing steam since late 2013 as the government initiated tighter measures to curb prices along with banks tightening its lending to the property sector.

The cooling of the market might be a welcome sign for the government since it has spent four years in trying to control the increase in home market prices, and sharp correction in these prices nationwide can drag down the economy a scenario the government is avoiding. China will continue to curb the demand in housing for this year and will use different policies in different cities based on its local conditions.

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