Uptick in sales won’t spark property revival

Strong sales and rebounding prices have raised hopes that China’s property sector is on the cusp of a turnaround. But those expecting a return to the rapid rates of construction growth seen over the past decade will be disappointed – developers are already building enough new homes each year to meet underlying housing demand, leaving limited scope for a sustained pick-up in construction activity. More positively though, the drag on economic growth from slowing property investment has now mostly run its course.