[photopress:property.jpg,full,alignright]There seems no end. The National Bureau of Statistics (NBS) has announced China’s real estate investment went up 28.5% from a year earlier to RMB988.7 billion ($130.6 billion) in the first half of 2007. Note that is just the first half. Not the full year.
The growth was 1.6% higher than the first quarter and 4.3% points higher than the same period last year.
Analysts, ever ready to explain the past, said the rising investment to was due to booming housing demand, excessive liquidity and robust housing price hikes. Which seems very likely.
Qin Hongyu, analyst with BNP Prime Peregrine, said, ‘The land resources authority has accelerated land supply growth in the first half of the year in hope that surging house prices could be reined in, which inevitably led to an investment hike in the real estate sector.’
That really is worth reading again. On the one hand the land resource authority released more land to try and bring down prices. This, and I like the word ‘inevitably’ as used here, led to increased investment. There seems, to a simple mind, to be a contradiction inherent in that statement.
Amid investment by real estate developers, domestic bank loans rose by 25.9% year-on-year, enterprises’ self-raised funds increased by 28.4% and foreign funds soared 68.7%.
The total area of ‘developed’ land in China rose 7.6% to 118 million square meters in the first half. However you look at those figures is is a quite astounding boom and it seems to have no future end. The question of when it will calm down and whether it will have a soft landing is now assuming crucial importance.
Source: Jongo News