China’s economy gets boost from property, construction

Bloomberg

China’s real estate sector grew faster than the overall economy in the second quarter as new home purchase restrictions in the biggest cities failed to deter buyers.
Economic output by real-estate brokers surged 8.8 percent from a year earlier in the April-to-June period, while construction activities jumped 7.3 percent, data from the National Bureau of Statistics showed this week. The nation’s Gross Domestic Product (GDP) grew 6.7 percent. Other industries such as technology, health and education increased by nearly 9 percent.
A housing recovery fuelled by cheap credit has supported growth this year even as headwinds loom for developers with bloated inventories. Property sales jumped by up to 42.1 percent in the first half, slowing from 54.1 percent in the first quarter after big cities like Shanghai and Shenzhen tightened criteria for some homebuyers. The world’s second-largest economy is continuing its transformation toward growth led by services, which are becoming a major pillar of the economy. Services accounted for more than half of output last year for the first time, while GDP data released this week showed consumption made up more than 70 percent of the expansion.
Notably, the services grew 7.5 percent in the second quarter from a year earlier, surpassing the 6.3 percent pace for manufacturing and 3.1 percent for agriculture.
The financial sector expanded around 5.3 percent in the second quarter amid a sluggish stock market, slowing from the 8.1 percent increase in the preceding three months. Lodging and catering services rose by around 6.8 percent.

China new home sales value up 22pc in June from year earlier
The value of China’s new home sales rose by about 22 percent in June from a year earlier, the slowest pace so far in 2016, as second-tier cities joined some of the nation’s largest hubs in imposing curbs to cool surging prices.
The value of homes sold rose to 1 trillion yuan (nearly $150 billion) last month from a year earlier, according to the calculations based on data the National Bureau of Statistics released this week.
The increase compares with a 32.9 percent surge the previous month and is down from a year-on-year gain of 71 percent recorded in March.
The government is seeking to clear a glut of unsold homes in smaller cities while encouraging curbs in economic hubs, where prices have soared amid stimulus measures and lowered interest rates. More regional hubs since last month followed top cities Shanghai and Shenzhen to impose curbs designed to stem a surge in property prices.
Local authorities raised mortgage down-payment requirements for some homes in Xiamen, a southern port city in the Fujian province, and Hefei, the provincial capital of Anhui, where housing prices led gains in May.
Property-development investment growth, which expanded at the slowest pace in 15 years in December, was 6.1 percent in the first half of this year. That compares with a 7 percent increase in the first five months.

Developers bought 3 percent less land in June compared with a year earlier. New construction starts expanded 4.9 percent last month, the slowest pace this year, according to Bloomberg calculations based on the official data.