BEIJING: China's real estate investment rose 35.2% in the first two months from a year ago, up from a 33.2% pace for all of 2010, the National Bureau of Statistics (NBS) on Friday, Mar 11.

That came after the government issued fresh measures in late January, including higher downpayment and a maiden launch of a property tax, to rein in the red-hot real estate market and keep housing inflation in check.

To counter the impact of property tightening measures, China is stepping up efforts to build more affordable housing. It plans to invest 1.3 trillion yuan (RM600.15 billion) this year to construct 10 million such units, up from a target of 5.8 million units in 2010.

Amid the tightening campaign, many banks have scrapped mortgage rate discounts, on top of three benchmark interest rate rises since mid-October, making it more expensive for home buyers to borrow from banks.

The NBS said mortgage loans to individuals fell 11.3% in the first two months to 128 billion yuan, registering a decline for the first time since February 2009.

As the cooling measures dampen developers' outlook for their industry, annual growth in newly started property construction slowed to 27.9% in the first two months from an increase of 40.7% in all of 2010, the NBS said.

However, that was still better than a sharp decline of 23.6% in China's overall newly started investment projects in the January-February period from a year earlier. The reason for this drop was unclear and the government will keep a close eye on it, Sheng Laiyun, spokesman for the NBS, said. — Reuters

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