China's housing sales growth decelerated sharply in July while developers, anticipating a further slowdown, pushed into smaller cities which have looser property controls than in big cities.
In July, housing sales by value rose 4.3% from a year earlier, according to calculations made by The Wall Street Journal based on data released Monday by the National Bureau of Statistics. That compared with a 26.4% gain in June.
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For the first seven months of the year, housing sales rose 15.9% from a year earlier, compared with a 17.9% increase from January through June.
As big cities tighten home-buying restrictions and credit lending policies, developers are fanning out to smaller cities to launch new projects. CIFI Holdings said it made its first forays into nine markets, including Wuxi, Wenzhou and Qingdao.
Developers are bracing for a continuation of the slowing sales growth this year amid stricter policies. Many signaled in recent earnings releases that they intend to speed up land acquisitions to shore up portfolios. That may cause housing inventories to swell again and risk weighing construction activity and real estate investment.
Property investment, including commercial and residential real estate, slowed to a 7.9% increase in the first seven months of the year at 6 trillion yuan ($900 billion). Investment grew 8.5% during the first six months of the year.
Construction starts rose 8% from a year earlier to 1 billion square meters. That compared with 10.6% growth for the first six months of the year.
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(END) Dow Jones Newswires
August 13, 2017 23:08 ET (03:08 GMT)