China outpaced the United States and Britain in commercial property sales in the first half of the year, underpinning hopes domestic demand will quicken a recovery in the mainland economy.
Analysts attributed the extraordinary gap between the East and the West to ample liquidity on the mainland, strong interest from buyers driven by the prospect of real estate investment trusts (reits) and the rosy outlook for the retail industry.
But they remain divided over whether the momentum would be sustainable this year as uncertainty over monetary policy grows.
The total value of deals in the commercial property sector on the mainland reached US$31.2 billion in the six months to June, according to a survey by US research firm Real Capital Analytics. US sales were US$16.2 billion during the period and Britain's were US$13.7 billion.
A report by the Ministry of Land and Resources last month revealed a 1.07 per cent year-on-year growth in average prices of land designated for commercial use in the first half. That is a greater gain than the 0.07 per cent advance in the average price of residential land and in sharp contrast to a 0.73 per cent drop in prices for industrial land.
A significant proportion of the sales was believed to have been financed by easy credit from state-owned banks, which were urged to lend more to combat a sharp economic slowdown. The splurge led to more than 7.7 trillion yuan (HK$8.75 trillion) worth of new loans between January and the end of last month, almost triple the amount over the same period last year.
