China realty topped, growth next

Cross-posted from Investing in Chinese Stocks.

An article from the China Finance 40 Forum covering China’s real estate market has lots of good charts. The second one below is the most important. It shows real estate investment as a share of GDP, falling and then picking up. In 2015, real estate investment slowed to 1 percent and in 2016, it is slowing a again, down to 5.3 percent YTD. Real estate investment grew faster than GDP at the start of 2016 though, to reach its highest share of GDP since 2013. This propped up Chinese GDP in the first half, but a downturn is already underway.

This next chart shows the turn in sales growth and then price (dotted line, NBS 70-city survey) clearly. The second shows real estate area under construction and prices (dotted line, NBS 70-city survey).

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.