China home sales surge 23% in first two months, defying curbs

A pedestrian using a smartphone as he crosses a road in front of residential buildings in Beijing, China, on Nov 25, 2016.
A pedestrian using a smartphone as he crosses a road in front of residential buildings in Beijing, China, on Nov 25, 2016.PHOTO: BLOOMBERG

SHANGHAI (BLOOMBERG) - China home sales remained resilient in the first two months of the year, signaling policy makers are struggling to check the booming housing market.

The value of new homes sold rose 23 per cent to 912 billion yuan (S$186.55 billion) in January and February compared to the first two months of 2016, according to National Bureau of Statistics data released on Tuesday (March 14). Sales rose 17 per cent in December, the last time the data was released.

The surge comes after top policy makers used this month's National People's Congress to reiterate a pledge to curb property speculation, and some local governments expanded home-buying restrictions.

New banking regulator Guo Shuqing has said he will pay close attention to real estate bubbles, after 45 per cent of new loans in China last year went to the property sector, with most going to personal mortgages.

Investment in real estate development gained 8.9 per cent in the first two months, slowing from 11.1 per cent growth in December, according to Bloomberg calculations based on official data. Growth in new property starts, a leading indicator of investment, moderated to 10.4 per cent from 12.5 per cent.