China home sales lose steam in November
Real estate restrictions in major markets appear to be working too well
ATSUSHI OTANI, NQN staff writer
HONG KONG -- The rise in Chinese home sales, which is currently underpinning the economy, decelerated by more than half last month due to government measures designed to head off a real estate bubble.
The National Bureau of Statistics reported Tuesday that 8.71 trillion yuan ($1.26 trillion) worth of homes were sold during the January-November period, a 39% jump from a year earlier. However, November's sales rose 16% on the year to 910 billion yuan, a marked slowdown from the 38% increase realized in October.
Real estate sales in terms of floor space rose 24.3% during the first 11 months of the year. The figure shrank 2.5 percentage points compared with January-October, marking the lowest level this year.
Major cities in China enacted new rules to curb soaring housing prices around the National Day holiday on Oct. 1. During that month, Shenzhen and Chengdu saw prices for new homes drop from September. For other leading cities such as Beijing, Shanghai and Tianjin, gains in those prices slackened significantly.
The slowing sales are starting to affect homebuilders. Investments in real estate development rose 6.5% on the year between January and November, a decrease from 6.6% in January-October.
The red hot real estate market is a key reason why China was able to maintain relatively steady economic conditions. That sector made up for the industrial base, which is undergoing supply-side reforms aimed at shedding excess capacity, as well as weak consumer spending. But real estate sales may head into negative territory next year, according to Hong Kong-based Macquarie Capital.