China’s property investment rose 6% in January-November year-on-year, slowing from the 7.2% growth seen in the first 10 months of the year, official data showed on Wednesday.
Property sales by floor area increased 4.8% during January-November from the same period a year earlier, compared with a 7.3% gain in the first 10 months, the National Bureau of Statistics said in a statement.
New construction starts measured by floor area fell 9.1% during January-November from a year earlier, compared with a decline of 7.7% in the first 10 months of the year.
Fitch, the rating agency, expects house prices to drop by 3-5% in both 2022 and 2023, with steeper drops in Tier 3 and Tier 4 cities.
“Market sentiment, particularly demand for pre-completion homes, has been dampened by credit stress among some weaker homebuilders,” Duncan Innes-Ker, a Fitch senior director in Hong Kong, said.
“We expect the authorities to intervene to contain market volatility, but downside risks remain,” he added.
Funds raised by China’s property developers grew 7.2% year-on-year in the January-November period after increasing 8.8% in the first 10 months of the year.
Last month, Barclays downgraded its 2022 full-year gross domestic product growth forecast for China due to a more significant contraction in property sales and investment than earlier expected.
“The change in house price appreciation expectations and a looming property tax could wipe out 15-25% of investment demand for housing,” economist Jian Chang forecast.
- Reuters, with George Russell
SEE MORE:
China Land Sales Slump For Fourth Month Amid Debt Crackdown
China Developer Kaisa Misses Payment as Sales Plunge
