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Real Estate Surge Helps Boost Domestic Demand
The real estate development sector in China is expected to maintain fast growth for the rest of this year, an official from the National Bureau of Statistics (NBS) said Wednesday.
Ji Fengxiang, deputy director of the Department of Statistics on Investment and Construction of NBS, said that the real estate development market was strong on both the supply and demand sides.
The area of land development and purchase, and the funding of real estate development grew at remarkably higher rates than the actual investment during January to April, according to the latest NBS figures.
The sales of housing and buildings surged 45.2 percent year-on-year in the period, indicating robust demand in the market.
According to the NBS, the real estate development sector entered a growth period in 1998 and is in the middle of a new booming era at present. The NBS said that the real estate market is expected to continue to grow for some time.
The Chinese government adopted a series of policies to encourage investment and expand domestic demand in the past few years. For example, it stopped collecting tax on fixed asset investment and abolished over 40 arbitrary fees that the government levied on the real estate sector.
Local economists said that the move has sent encouraging signals to both developers and consumers who are planning to invest in real estate.
Ji said that the housing market received another major boost from the transformation of the traditional allocation system of housing into a market system. As the government uses proceeds from issuing treasury bonds to fund the construction of affordable housing for low-income sections, more and more people are spending money on real estate.
According to Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress, China is to build eight billion square meters of housing in the next decade as it accelerates the process of urbanization.
It is expected that the real estate development sector will become a growing part of domestic demand this year to pull up demand for refurbishing and household appliances.
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