BEIJING (Reuters) – China’s property investment hit a two-year low in December even as it grew at a solid pace in 2019, adding to recent signs of a slackening in the sector and suggested Beijing might need to offer more stimulus to stabilize a cooling economy.
Real estate investment, which mainly focuses on the residential sector but includes commercial and office space, increased 9.9% in 2019 from the year-earlier period, down from 10.2% in the first 11 months but still outpaced a 9.5% gain in 2018.
In December alone, year-on-year growth slowed to 7.3% from 8.4% in November, the weakest pace since December 2017, according to Reuters calculations based on data released by National Bureau of Statistics (NBS) on Friday.
The reading was in line with other activity data out on Friday that showed the world’s second-largest economy grew 6.1% in 2019, the slowest in 29 years, and was likely helped by looser monetary policy as it gave developers relatively easier access to credit.
New bank lending in China hit a record of 16.81 trillion yuan ($2.44 trillion) in 2019, while China’s central bank has announced eight cuts in banks’ reserve requirement ratio (RRR) since early 2018, freeing up more funds and driving down lending costs.
“There was some slowdown in December but we don’t need to be too concerned with property because things are improving on the financing side,” said Yang Yewei, a Beijing-based analyst with Southwest Securities, who noted an increase in mortgages in December.
Funds raised by China’s property developers grew 7.6% in 2019 year-on-year, NBS data showed, faster than the 7% pace in the first eleven months.
Chinese property developers kicked off the new year with a strong pipeline of bond issuance, in particular for long-tenor notes, taking advantage of easier regulatory approvals and robust market demand.
But analysts say investment in actual construction has slowed notably as developers exercised caution, although they appear still eager to bid for land.
Measured by floor area, new construction starts rose 7.4% in December from a year earlier, recovering from a 2.9% decline in November when it hit the worst level seen in more than two years, according to Reuters calculations.
Land sales by floor area in 300 major cities tracked by China Index Academy fell 1% on-year in 2019, while transaction value surged 19%, providing a much needed boost to local government purse strings.
SLUGGISH SALES
The government is keen to defuse housing bubbles after years of supercharged price gains. However, since the real estate sector remains a key pillar of the economy, any more weakness could influence the pace and scope of fresh stimulus measures expected from Beijing this year.
Property sales by floor area, a major indicator of demand, fell 0.1% in 2019 from a year earlier, marking the first full-year decline in five years since the last downturn in 2014, when it slumped 7.6%, the NBS data showed on Friday.
In December, they fell 1.7%, compared with a modest increase of 1.1% in the previous month, ending five months of consecutive growth, Reuters calculated from official data.
Analysts say a continued downturn in sales on the back of government controls to curb speculation will constrain price growth in coming months, dampening developers’ appetite for front-loading construction.
Data on Thursday showed China’s new home prices grew at their weakest pace in 17 months in December, with broader curbs on the sector continuing to cool the market in a further blow to the sputtering economy.
Some analysts say the government could potentially dial back stimulus when economic growth stabilizes in order to lower debt risks.
“It is likely that the government could take the chance of an economic warm-up to consolidate local government finance and continue the property market control, which might set an up-limit for GDP growth in this year,” J.P. Morgan Asset Management Global Market Strategist Chaoping Zhu wrote in a note.
(Reporting by Yawen Chen and Ryan Woo; Additional Reporting by Stella Qiu; Editing by Shri Navaratnam)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
