Real Estate Investment Starts Positive in 2016; Funding Lags

This is a month where I definitely want to see the provincial numbers. Growth of 3% nationally was driven by the wealthier and more developed eastern provinces.

Although the year has started with a positive number, 2015 started with a 10.4% increase in investment and it went downhill from there. Supporting a more positive outlook for 2016 is the spike in land and home sales. The negative is weak funding growth.

Home sales by area (yellow) and yuan amount (blue)
Land Sales

The finance side of real estate investment doesn't look strong. Mortgages are positive, experiencing 30.6% yoy growth, but investment capital has declined 1.0% since last year. Domestic borrowing is down 9.5%; foreign capital is down 82.8%; private raised capital is down 7.6%; other financing is up 13.3%, of which advance payments are up 8.3%. Putting that together with the mortgages, it indicates there is no supply side growth in real estate investment, rather the credit boom is shifting capital into real estate via the demand side.

NBS: 2016年1-2月份全国房地产开发投资和销售情况

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