Investment in China's real estate sector rose 24 percent year-on-year in the first seven months, reaching 941.1 billion yuan (US$117.6 billion), the National Bureau of Statistics (NBS) said Thursday.

 

Investment growth is marginally down from the 24.2 percent recorded in the first six months.

 

The figure emerged following a slight drop in China's investment in urban fixed assets, which rose to 4,477.1 billion yuan in the first seven months of the year, up 30.5 percent on the same period last year, but 0.8 percentage points lower than the January-June period.

 

Investment in mid-range housing rose 29.2 percent to 657.5 billion yuan, said the NBS in a monthly report on China's real estate market.

 

Investment in affordable housing, warmly encouraged by the government in the wake of popular complaints about soaring housing prices, was up 5.7 percent to 27.5 billion yuan.

 

The report registers a slight increase in the real estate climate index, showing that the real estate market is still hot despite a series of government measures to tighten tax, and restrict loans and land allocation.

 

The real estate climate index is a composite index reflecting the current real estate market situation in China and development trends. The sub-indices include investment, source of capital, the floor space of marketable yet unsold buildings, areas of land developed and the floor space of buildings under construction. 

 

In July the index stood at 103.51, up 1.54 over the same month of last year and 0.58 higher than June.

 

It was the fifth consecutive month-on-month increase since March, when the index grew 0.41 points over February. It rose 0.15 points in April, 0.26 in May and 1.06 in June.

 

The report came after new measures to tighten property lending, banning loans to property developers whose self-financing is less than 35 percent of their investment.

 

The government is keen to tame the roaring property market which has sparked grave public concern over housing prices. An increasing number of citizens are complaining that they cannot afford to buy property.

 

The expansion of real estate investment and bank lending is also seen as fanning financial risks.

 

By the end of July, 121 million square meters of mid-range housing were vacant in China, too high a figure for a market sustained by bank loans.

 

Vacant space in residential buildings was up 10.8 percent at 66.1 million square meters.

 

From January to July, 1.485 billion square meters of housing were built, up 19.2 percent on the same period last year. About 127.3 million square meters of land were developed, an increase of31.8 percent, according to the NBS report.

 

(Xinhua News Agency August 18, 2006)