China’s property market cooled in 2021 as Beijing stifles in developers

BEIJING — Property investment and new construction starts fell in China in 2021 as the government’s decision to limit developer debt hampered an important pillar of the country’s growth.

Overall investment in China’s property sector rose 4.4 percent in 2021, down from the 7.0 percent growth rate recorded in 2020, the country’s National Bureau of Statistics said Monday. The result was weaker than the 6.0% year-on-year gain seen in the first 11 months of 2021.

In December, Chinese real estate investment plunged 13.9% from a year earlier, compared with a 4.3% drop in November, according to Wall Street Journal calculations based on data released on Monday.

New construction starts, measured by floor area, also contracted in 2021, falling 11.4% from a year earlier. The slowdown was far more pronounced than the 1.2% decline recorded in 2020, and worse than the 9.1% year-on-year decline in the first 11 months.

New home starts were relatively robust in the first half of 2021, but began a downward spiral in July after property developers began to feel the pressure from regulatory measures to get their debt levels under control.

Meanwhile, volume home sales – an indicator of demand – rose 5.3% during 2021, compared to a 9.3% gain during the January-November period.


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