China's property investment growth hits 5-year high driven by smaller cities

Postado Março 17, 2019

China's survey-based jobless rate rose to 5.3 percent in February, from 4.9 percent in December, the statistics bureau said, though it was below the government's target of 5.5 percent this year. It is was also predicted that the growth will be small because reserves deplete at the main production fields and as new discoveries tend to be marginal.

The NBS said robust investment in the property sector was due to steady housing prices and an increase in property construction.

Cheng Shi, chief economist at ICBC International, said recent supportive policies have shored up confidence in economic prospects, as signaled by the stock market's upward trend and the stability of the yuan since the beginning of the year. The pressure on unemployment could also be due to the ongoing trade war between the USA and China.

"The market has obviously become better this month", said a senior executive from a top Chinese developer, who declined to be named because he is not authorized to speak to media. "The economy faces downward pressure", he told reporters.

Slower sales continued to hit China's real estate developers' bottom line.

The NBS does not release individual monthly investment data for January or February but combines them to account for the seasonal distortions from the week-long Lunar New Year holiday, which typically falls in either month.

Growth in fixed-asset investment, a major growth driver in the past, quickened to 6.1 percent in the first two months of this year, slightly more than analysts had expected and edging up marginally from 5.9 percent in 2018. The unemployment rise comes as the growth of industrial production fell to its lowest rate in a decade of 5.3% in January, and down from 5.7% growth in December. Beijing is counting on consumers and renewed investment to stabilize the economy.

Failed land auctions in China have increased significantly since the second half of 2018.

On an annual basis, home prices rose 10.4 percent in February, accelerating from a 10.0 percent gain in January.

Output growth at China's factories and workshops for the first two months slowed to 5.3% year-on-year, from 5.7% in December, a multi-year low and short of forecasts. Chinese Premier Li Keqiang last week laid out a lower growth target of 6.0-6.5 percent this year, from 6.6 percent growth in 2018, which was already the slowest pace for nearly three decades.