Since the Chinese government implemented curbs on the property market two years ago, growth in both property development and property sales has trended downwards. However, according to the latest data published by the National Bureau of Statistics (NBS), the property market showed signs of improvement in Q2 2012.
As the chart below shows, the annual decline in floor space of residential buildings sold moderated to 8.3% from 15.5% in Q1 (dark blue), while the total value of residential buildings sold rose by 1.4% annually in Q2 ? sharply up from a drop of 17.5% in Q1 (red line). Across 70 large and medium-sized cities monitored by the NBS, average property prices finally ceased falling in June. The number of cities recording a monthly average rise increased to 25 in June, up from 6 in May and 3 in April.
China?s real estate development from Timetric
The improvement in property sales and a return to property price growth may be preliminary signs of a recovery in the residential property market. This also comes on the back of growing market expectations that the government will loosen restrictions as the economy continues to slow down (economic growth moderated to 7.6% annually in Q2 from 8.1% in Q1).
Real estate investment is a key sector of the Chinese economy, accounting for 13% of the economy in 2011. Property taxes finance the lion share of local governments? expenditure and the sector has close linkages to other industries, from steel production to retail sales of home appliance. Thus, there is growing pressure for Beijing to loosen property market control in order to stimulate economic growth. The two interest rate cuts in June and July by the People?s Bank of China were perceived as a change in the government?s official stance, although this was later denied by the central bank and other government departments.
Moreover, fine-tuning policies by local governments, including providing purchase subsidies, raising the ceiling on provident fund loans that home buyers can borrow and raising the property tax threshold on home purchases, have all been permitted by the central government. This also fuelled expectations that the current round of property market curbs may be coming to a close. As a result, many potential buyers decided to conclude transactions in the past two months to secure a ?low? price as they now expect prices to rise again.
However, on the supply side, property development remained subdued in Q2 owing to government restrictions. Land acquisition by real estate developers (green line) and newly started construction of residential building (light blue) declined further in annual terms in Q2. Land acquisition fell by 29.5% annually in Q2, following a drop of 3.9% in Q1, while newly started construction reduced by 14.5% annually, down from a 5.2% decline during the same period. This raises concerns of a housing supply shortage in the medium term, and an even bigger jump in property prices if the sluggish pace of property investment persists. This is part of the reason why Premier Wen also called for supporting the supply of low-end and affordable housing in order to meet rising demand from first-time home buyers.? The government faces a difficult task of supporting fundamental demand, discouraging speculative activity, whilst buttressing economic growth given the fragile global economic environment.
Source: http://byline.timetric.com/2012/08/02/china-property-sales-picked-up-in-q2-2012/
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In case you hadn't already heard, NASA's Curiosity rover -- which is the largest rover NASA has ever launched -- should touch down on the Martian surface in just over four days. That fateful night comes after nearly eight months of interplanetary travel, and thankfully for New York-based space nuts, the sizable Toshiba Vision screens perched above Times Square will be broadcasting all the action as it happens. All the rest of you will have to make do with the two live video feeds that NASA will be streaming come August 6.
