China Home Sales Increase in First Quarter

China’s housing sales value rose 26 percent in the first quarter as homebuyers increased their purchases even as the government stepped up its measures to curb speculation. Property stocks exercise bike climbed to a five-month high.

The value of homes sold increased to 860.7 billion yuan ($132 billion) from a year earlier, the Statistics Bureau said today, driving overall property transactions 27 percent higher to 1.02 trillion yuan. The amount was released separately from home prices after the government in January changed the way it reports housing price data in 70 cities.

Premier Wen Jiabao said April 13 in a cabinet meeting that the country faces challenges including rising property prices in many cities even as real estate transactions shrink. About 40 Chinese cities last month said they will cap new home prices below annual economic and disposable per-capita income growth or keep them steady following the central government’s measures to rein in housing values.

“Home sales and investment, lagging indexes, remained strong, but the volume for new construction dropped,” said Bai Hongwei, a Beijing-based property analyst at China International Capital Corp., the country’s biggest investment bank. “It showed the government’s measures are working. If real estate investment drops sharply, it will immediately impact China’s economic growth a lot.”

China’s economy grew a more-than-estimated 9.7 percent in the first quarter and high pressure sodium lamp inflation accelerated in March to the fastest pace since 2008, the government said today.

Shares Rise

The measure tracking property stocks on the Shanghai Composite Index climbed 0.9 percent to the highest since Nov. 8 as of the 11:30 a.m. midday break. It’s also the biggest advance among five industry groups on the benchmark gauge today.
Home sales value in March rose to 414 billion yuan, close to the total of the first two months this year of 447.1 billion yuan, based on calculations subtracting government data in the first two months from the first-quarter figures. A total of 158.5 million square meters (1.7 billion square feet) of homes were sold from January to March.
New home construction rose 20 percent in the first quarter to 310.2 million square meters, the statistics bureau said.
The effects of the government’s controls on the property market were evident in the first quarter, Sheng Laiyun, spokesman for the statistics bureau, said in Beijing today. The government is pushing for the golf irons development of more low-cost homes, which will have a “relatively big” impact on housing prices as supply increases, he said.

Clear Targets

The government has clear targets, is resolute and has forceful measures to control the market, he said at a briefing to discuss the nation’s first-quarter economic performance.
February new home prices increased in all but two of the 70 Chinese cities monitored by the government. The national statistics bureau is scheduled to report March’s home price data on April 18. Nationwide prices rose 0.6 percent in March, led by smaller cities, SouFun Holdings Ltd. (SFUN) said on April 1.
China’s investment in real estate rose 34 percent to 885 billion yuan in the first quarter, according to the government data today. The current tightening measures will remain in place for the led downlight remainder of 2011 and likely into 2012, Jones Lang LaSalle, a property consulting company, said this week.