[photopress:w_AspacT.jpg,full,alignright]No matter how hard the government tries to rein in investment China’s red-hot real estate industry continues to attract money at double-digit annual growth rates.
Take the first ten months of this year. Total investment for completed projects in the sector in the first ten months grew at a brisk 24.1 percent. That is to RMB146 billion ($18.5 billion) compared to a year earlier. This according to China’s National Bureau of Statistics, which posted the data on its website.
There are no single-month breakdowns provided but simple maths show that if there was RMB129 billion ($16.3 billion) investment for completed projects in the first three quarters, total investment in October was roughly RMB17 billion ($2.2 billion) a bit down from September – RMB18.39 billion ($2.3 billion) — but still higher than August’s RMB16.52 billion ($2.1 billion).
The majority of the money, 71 percent, has flowed into residential projects which is RMB103 billion($13 billion) or a 28.4 percent increase year-on-year. In fariness industrial projects have cooled somewhat, ony a 9.8 percent increase from a year ago.
The Chinese government has seriously tried. It has imposed a number of restrictions on real estate ownership. In July for instance, authorities restricted home ownership, with few exceptions, to those who have been residents of the country for a year. They also mandated that foreigners must receive official approval before buying property they don’t plan to live on. It made foreign real estate development more difficult, by requiring non-Chinese investors to put up 50 percent of the capital in projects totaling more than $10 million.
So far, none of it seems to be working as well as it might.
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