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 Sales last month climbed 32.5 percent from May to 591 billion yuan
($95.21 billion), according to Reuters calculations based on
official data released on Wednesday. That compared with a 6.7
percent rise in May.
Compared to a year earlier, however, sales by value fell 5.4 percent
in June, suggesting cash-strapped developers were cutting prices and
offering other incentives to entice buyers and reduce inventories of
unsold homes in a weakening market.
The single-month figures contrast sharply with those for
January-June combined, adding to evidence that a steady stream of
government stimulus measures in recent months has helped to shore up
economic activity after a weak start to the year.
Property sales dropped 6 percent in the first half in terms of floor
space, and 9.2 percent by value to 2.56 trillion yuan.
Thanks largely to stimulus, China's economy grew slightly faster
than expected in the second quarter, expanding by 7.5 percent from a
year earlier, just ahead of the pace in the first quarter.
But many market watchers still voice concerns over the outlook for
the property industry. "The biggest risk (to the economy) for the
second half is a property correction and related financial risks,"
said Chang Jian, an analyst at Barclays Capital in Hong Kong.
Growth in real estate investment slowed in the first half of the
year as sales slipped and new construction plunged, official data
showed.
Real estate investment, which affects more than 40 other sectors
from cement to furniture, rose 14.1 percent in the first half from
the same period a year ago, down from a rise of 14.7 percent in the
first five months.
New property construction slumped 16.4 percent.
The data echoes anecdotal evidence that suggests home sales slumped
in the first half of this year after a strong performance in 2013.
To counter the housing slowdown, Beijing has cut taxes and loosened
monetary policy to bolster activity in the sector, which accounts
for over 15 percent of the country's annual gross domestic product.
Some local governments have also started to ease restrictions on
property purchases which were put in place in recent years at
Beijing's behest to deter speculators and curb red-hot housing
prices.
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Stronger-than-expected June bank lending was also seen as a signal
that policymakers were growing more concerned about the drag from
the property sector on the broader economy.
Mortgage lending rose 6 percent in June to 117 billion yuan from the
previous month, official data on Wednesday showed, compared with
monthly growth of 2.5 percent in May.
A senior central bank official was quoted as saying this week that
Chinese banks increased their lending to the property sector by 18
percent in the first six months of 2014 compared with the year-ago
period, in what he said is a "forceful" show of support.
Average home prices in China fell for the first time in May. The
government is scheduled to release housing prices data for June on
Friday. Some analysts say large inventories of unsold homes and
recent sluggish sales are likely to trigger deeper price cuts in
coming months, as developers try to protect their cash flows.
Developers with smaller or more fragile balance sheets may have
problems servicing their debts if the downturn is prolonged.
But other experts believe China's housing market is unlikely to
suffer a sharp correction due to government support, high
downpayment levels and low household debt, limiting the fallout for
the broader economy.
(Editing by Clarence Fernandez & Kim Coghill)
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