Besides steel production, China’s real estate investment data is the other major statistic that smart local investors focus on because that has kept economic growth ticking over in recent years, and driving steel demand, which in turn drives demand for Australian iron ore, and increasingly coking coal. sz2
The official data for January and February showed that growth in Chinese real estate investment slowed to 8.9% in the first two months of 2017 from the same period a year earlier, while property sales jumped, in spite of attempts by local and other governments to cool demand.
The January-February investment growth, reported by the National Bureau of Statistics (NBS), was much stronger than the 6.9% for all of last year, 6.3% in December and the strongest for 2 years.
Property sales by area rose 25.1% year-on-year in the first two months of this year. That was above the 22.5% rate in 2016, which was the strongest annual growth in seven years thanks to a property boom in top-tier cities such as Beijing and Shanghai.
Property sales area rose 11.8 percent in December alone, according to Reuters data.
Policymakers have started to worry about an overheating property market and the risk of a sudden and sharp correction hitting the economy. Central bank data last week showed household loans, mostly mortgages, accounted for 25.7% of new loans in February, down from 37% in January and 50% in all of 2016.
And China’s banking regulator and central bank have told banks to curtail new mortgage lending, state-owned newspaper Economic Information Daily reported on Monday, citing unnamed banking sources.
And according to the Financial Times the data this Saturday on house price movements could be a big surprise with a big slowdown revealed after action by local and provincial governments to halt or control speculation.
The clampdown started with concerted policies from more than 20 city governments to decrease demand for house purchasing. They have raised the minimum deposit required for taking out a mortgage and made it more difficult to buy extra homes,” the FT reported overnight.
"In addition, financial regulators have rolled out nationwide measures to restrict developers’ access to financing through the state banks and via the stock and bond markets. The effect has been a sudden halt in house price growth in the cities designated as “hotspots” by regulators.
"The latest official data show that in January, prices for newly built housing sold on the commercial market, excluding government-subsidised housing, stayed largely flat from the previous month. Prices in the port cities of Shenzhen and Shanghai even came down by a fraction of a percentage point.
"The collapse in price growth is in stark contrast to month-on-month increases — as high as 7 per cent — registered in Shenzhen in 2015. In spring last year, prices were rising at an annualised rate of more than 60 per cent. By January of this year, prices had increased by just 18 per cent over the previous 12 months. as investor interest waned,” according to the FT.
