Investment in China’s real estate market rose at the fastest pace in three years during the first two months of 2018 but growth trends for sales value and volume diverged in a potential signal of tougher times for lower-tier markets.
Real estate investment during the first two months of the year rose 9.9 per cent year on year to Rmb737.9bn ($116.8bn), the fastest rise since the same period in 2015, according to figures from the National Bureau of Statistics.
The pickup in investment was tracked by sales value, which climbed 15.3 per cent year on year during the same period to Rmb1.25tn, the fastest growth in five months.
But sales growth was far slower when measured by floor space, rising just 4.1 per cent year on year to 146.3m square metres and coming in at the weakest pace since June 2015, when the measure began its current growth streak.
Taken together the latest official data point to a more buoyant environment for mainland China’s real estate sector on the whole than might’ve been indicated alone by the January data on new house prices across 70 major cities, which notched a rise of just 5 per cent, according to a weighted average from Reuters.
But the divergence between sales value and volume doesn’t rule out a scenario in which turnover in major cities’ property markets is the chief driver of overall sales value, while less-developed markets suffer from a drop-off in interest from both developers and potential buyers.