China’s real estate investment growth quickened in October to its highest since April 2014, suggesting the property market remains resilient even as home sales have been hit by a raft of tightening measures.
Property investment rose 13.4% in October from a year earlier, compared with 7.8% in September, according to Reuters calculations based on data issued by the National Bureau of Statistics (NBS) on Monday.
For the first 10 months of the year, property investment grew 6.6%, accelerating from 5.8% in the first nine months.
The relatively robust investment numbers belie stepped up tightening measures such as higher down payments and bans on second-home purchase. China has also made it harder for property developers to issue bonds, which has discouraged real estate firms from raising funds for new constructions.
But Monday’s data showed real estate developers have yet to feel any notable pressure from recent measures to curb speculative buying, potentially driven by the push to finish construction projects as home sales volumes have shown signs of declining.
In October alone, the area of property sold rose 26.4%, slowing from a 34% rise in September.
Property sales by floor area in the first 10 months rose 26.8%, slightly down from 26.9% growth in January-September.
A housing glut in tier-two cities led to a more significant sales slump last month there compared with tier-one cities.
China’s real estate land supply dropped 7.8% on the year to stand at 71,000 hectares in the first nine months in 2016, the Ministry of Land and Resources said in a notice on November 1.
New construction starts in October were up 19.9% from a year ago, measured by floor area.
Growth in inventory floor area last month was 1.3% higher than one year earlier, compared to 4.7% in September.
China has depended on a red-hot real estate market and government infrastructure spending to drive growth this year, which clocked 6.7% in the third quarter.
However, analysts expect property investment to be a drag on the real economy over the coming months as domestic demand gets squeezed.
Property sector contributed 8% to China’s GDP growth in the first nine months of 2016, according to the spokesman from China’s National Statistics Bureau.