(Updates with reserve ratio increase in fourth and closing share price in eighth paragraph.)
June 14 (Bloomberg) -- China’s May home sales transaction value rose 17 percent from April as developers marketed more residential projects during the Labor Day long weekend even as the government maintained its housing curbs.
The value of homes sold increased to 380.9 billion yuan ($58.8 billion) from 324.9 billion yuan in April, based on the difference between the statistics bureau’s data for the first five and four months. The five-month data, which doesn’t break down individual months, was reported today along with inflation.
“Home sales in May rebounded because developers launched more projects in the market, but the increased inventory will add pressure for them in coming months” as supply of homes exceeds demand, said Jinsong Du, an analyst at Credit Suisse Group AG in Hong Kong. “The data showed new property and home construction slowed in May, which signals developers don’t have a positive outlook for the market.”
The central bank today increased banks’ reserve ratio requirements for the ninth time since October following the property and inflation data. The government said last month it will maintain curbs after raising the minimum down payment for second-home purchases this year and introducing residential property taxes in Shanghai and Chongqing.
Greentown China Holdings Ltd.’s contracted home sales year to date was 17 billion yuan, less than expected, RTHK reported yesterday, citing the company’s Chief Executive Officer Shou Bainian. The Hangzhou-based developer is “unsure” about achieving the sales target for 2011, RTHK said, citing Shou.
Transaction values declined 21 percent in April from March following the housing measures, prompting the statistics bureau to say last month that the curbs have achieved “preliminary effects.”
Home sales values climbed 16 percent from January to May to 1.57 trillion yuan, while all property transactions amounted to 1.86 trillion yuan, 18 percent higher than the previous year, the statistics bureau said today.
The measure tracking property stocks on the Shanghai Composite Index extended gains after the data, rising 3.7 percent at the 3:00 p.m. close, the most among five industry groups on the benchmark gauge. The advance in the property index was the most since Jan. 21. The central bank announced a half percentage point increase in the reserve requirement after the close, taking the ratio to a record 21.5 percent for the nation’s biggest lenders starting June 20.
Real Estate Investment
China’s investment in real estate rose 35 percent to 1.87 trillion yuan in the first five months, according to the government data today.
New property construction climbed 24 percent in the first five months to 761.2 million square meters, according to the statistics bureau.
China’s inflation accelerated to 5.5 percent in May, the fastest pace in almost three years, and industrial output grew more than economists forecast. The annual gain in consumer prices matched the median estimate in a Bloomberg News survey of economists. Production rose 13.3 percent last month, the statistics bureau also said in Beijing today. That compared with a median 13.1 percent forecast.
April new home prices increased in all but three of the 70 Chinese cities monitored by the government. The national statistics bureau is scheduled to report May’s home price data on June 18.
Nationwide prices rose 0.5 percent in May, the ninth consecutive month of gains, as smaller cities withstood government curbs, SouFun Holdings Ltd., the country’s biggest real estate website, said on June 1.
--Bonnie Cao. Editors: Linus Chua, Andreea Papuc
To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Andreea Papuc at email@example.com