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China property sales continue to grow: Moody's

SALES growth of China's real estate market will remain resilient for the rest of 2015, according to rating agency Moody's.

"We expect our rated developers to launch more projects for sale and take advantage of the current strong sales momentum," said Stephanie Lau, a Moody's assistant vice president and analyst.

Sales value of commercial housing in the first eight months went up 15.3 percent year on year to 4.8 trillion yuan (US$755 billion). The growth rate was 1.9 percentage points higher than that in the first seven months, indicating nascent signs of recovery, according to the National Bureau of Statistics (NBS).

Moody's attributed the growth mainly to the supportive monetary and regulatory policies implemented since the second half of 2014.

China's housing market took a downturn in 2014 due to weak demand and a surplus of unsold homes. The cooling has continued into 2015, with both sales and prices falling and investment slowing.

The central bank has moved to combat the slowdown, cutting benchmark interest rates four times since November and lowering banks' reserve requirement ratio twice since February.

To help emerging signs of improvement in the property sector, the country eased down payment requirements for second home purchases and some local governments have rolled back their restrictions on home purchases.

China's banking and housing regulators slashed down payment requirements for second home purchases using provident funds to 20 percent from 30 percent in late August, provided the buyers have paid off mortgages on their first home.

"These favorable policies will support sales over the next 12 months and help maintain healthy year-on-year growth for the rest of 2015," Lau said.

Average new home prices of the 70 large and medium-sized cities surveyed in August grew 1.7 percent year on year compared with a drop of 0.4 percent in July, marking growth for the first time in the past 11 months, thanks to better market confidence and lower interest rates, the NBS said.

The southern city of Shenzhen posted a sharp rise of 31.8 percent in new home prices.

For existing homes, 43 cities posted gains in August on a monthly basis, 11 reported flat prices, while 16 saw price declines.

Moody's expected the pressure on home prices will continue to ease gradually through 2015.

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