China’s real estate sales up, up and away

The National Bureau of Statistics (NBS) said on Wednesday that new home sales in China rose a whopping 40% in the first 8 months of 2016.

New home sales valued at 5.7 trillion yuan ($865 billion), excluding government-funded affordable housing, were sold from January to August, down from the 41.2% growth in the first seven months and a 44.4% growth in the first half. All in all, it is steady-as-she-goes for China’s housing market.

It is often hard for Chinese individuals to bring money out of the country and the local equity market is too volatile. Bond yields are also not very attractive. The corporate bond market is just getting started, so local investors are more inclined to stick to the old faithful: real estate. First time home buyers from rural areas are also still piling into the cities. Urbanization trends remain in place in China.

According to NBS, 774.8 million square meters of new homes were sold in the last 8 months, up 25.6% from the same period a year earlier. The growth rate has been relatively stable all year, all double digit 20s.

“The country’s real estate inventory destocking measures proved to be quite effective so far with a more notable decrease in the residential sector,” said Shen Laiyun, a bureau spokesman.

Source: Forbes