Property sales down in October

BEIJING: China’s property sales and new construction starts fell last month as the property market cooled from a two-year boom in the face of a tighter liquidity environment and a crackdown on riskier lending.

Real estate investment growth also cooled last month, in line with expectations, as the government looks to engineer a soft landing for the property sector amid a gradual slowdown in China’s economy.

Real estate, which directly affects 40 other business sectors in China, is a crucial driver for the economy but also poses a major risk as China looks to tame soaring home prices without triggering a crash.

Property sales by floor area fell by six per cent last month from a year earlier, compared with a 1.5 per cent decline in September, according to Reuters calculations, the biggest decline since the first two months of 2015.

“(That decline) is exactly what the government is looking for,” said Sun Hung Kai Financial Beijing office head Jonas Short.

“What’s driving a lot of the declines, particularly in sales, is mortgage rates spiking up.”

Sales by value fell by 1.7 per cent on-year last month, the first decline in monthly property sales value since March 2015, compared with a 1.6 per cent gain in September.

Property investment grew 5.6 per cent last month from a year earlier, cooling from expansion of 9.2 per cent in September. Reuters