In This Article:
(Changes throughout, adds details, background)
* August property investment +10.5% y/y vs +8.5% y/y in July
* August sales by floor area +4.7% y/y vs +1.2% y/y in July
* August new construction starts +4.9% y/y vs +6.6% y/y in July
Beijing, Sept 16 (Reuters) - China's property investment grew at its fastest pace in four months in August, a boon for the economy as other sectors weaken from the Sino-U.S. trade war and consumer demand slows.
Sales growth accelerated to the highest in more than a year but a surge in demand could be concerning for policymakers who want to reduce high household debt and manage potentital bubble risk.
Property investment is a significant contributor to growth in the world's second-largest economy. A robust real estate industry has helped China counter a broader slowdown in its economy from a protracted trade war with the United States.
Property investment in August rose 10.5% from year earlier, quickening from July's 8.5% pace, marking the fastest growth since April, according to Reuters calculations based on National Bureau of Statistics (NBS) data on Monday.
For January-August, property investment also grew 10.5% on year, versus a 10.1% gain in the same period last year and 10.6% in the first seven months.
The stronger August investment and sales readings come amid a prolonged contraction in factory activity and a sharper fall in producer prices for the month, which have fuelled worries that a global recession may be around the corner as growth in China loses steam.
Property sales by floor area, a crucial barometer of demand, rose 4.7% in August year on year, up from July's 1.2% growth and was the fastest growth since July 2018, Reuters calculations showed.
Major property developers, including China Vanke and Country Garden holdings reported on-year increase in contracted sales in August.
For January-August, sales still fell on an annual basis, contracting 0.6% after a 1.3% decline in the first seven months.
Property prices are still growing at nearly 10% after more than three years of policy tightening. Some cities are showing signs of rapid cooling but others are plagued with overheating risks.
Among measures to support the economy recently, the central bank freed up 900 billion yuan ($127.2 billion) in liquidity earlier this month by cutting banks' reserve requirement ratio (RRR).
The authorities, however, have vowed not to use the property market as a form of short-term stimulus while it steps up efforts to stimulate the economy.
In August, China's banking and insurance regulator said it had uncovered a number of violations among small lenders such as extending loans to undercapitalised real estate projects and over-indebted local government platforms.