Property construction growth down sharply in 2011

The pace of growth in new construction starts slowed in 2011 amid tightening government restrictions in the real estate sector, The Wall Street Journal reported. Construction starts increased 16% in terms of floor area to 1.9 billion square meters in 2011, down from 42% growth the year before. Property development investment climbed 28% to RMB6.17 trillion (US$978.43 billion) over the same period, down from a 33% rise in 2010. However, property sales held up better, growing by 12% in 2011 to RMB5.912 trillion, down only slightly from 13% increase in 2010. Many analysts expect the rate of growth to fall further in 2012 due to lower private sector investment and more modest targets for the government’s public housing expansion program.  On the whole, “there is some deceleration but it’s not catastrophic,” said Rosealea Yao, an analyst at Dragonomics Research.