China's May property investment growth slows as curbs bite

BEIJING: Real estate investment in China rose at a slower pace in May, as more smaller towns joined bigger cities in trying to curb red-hot housing prices.

Real estate investment in May rose 9.8% from a year earlier, slowing from 13.7% seen in April, Reuters calculations, based on data from the National Bureau of Statistics on Wednesday, showed.

For January-May, property investment grew 18.3% from the same period last year, slower than a 21.6% increase in January-April.

With China's economy rebounding from last year's coronavirus-induced slump, authorities have stepped up efforts to rein in home price rises this year to curb speculative activity and prevent an asset bubble.

Local policies include capping prices set by developers and preventing some real estate agencies from setting excessively high second-hand home prices. Banks in major cities also hiked mortgage rates.

Property sales by floor area rose 9.2% in May from a year earlier, slower than 19.2% growth in April, Reuters calculations showed.

New construction starts, measured by floor area, fell 6.1% in May, narrowing from the 9.3% decline in April.

Funds raised by China's property developers grew 29.9% on the year, down from growth of 35.2% in the first four months.

Comparisons to last year are highly skewed by the sharp drop in activity early in 2020 when COVID-19 lockdowns paralysed much of the economy. Still, home prices have been extending gains on a monthly basis despite growing curbs on developers and buyers.

A Reuters poll in June found property investment is expected to rise 7% in 2021, in line with the pace in 2020, while home prices were seen rising 5%.