REAL estate investment growth slowed slightly in the second quarter from the first, suggesting government curbs to rein in the red-hot property market are starting to hit speculators even though underlying demand remains resilient.

As part of a broader effort to temper financial risks, authorities have slapped a flurry of cooling measures over the past year to defuse a housing bubble. Those steps targeted at speculators in the biggest cities appear to be paying dividends.

Growth in property investment, which mainly focuses on residential but also includes commercial and office space, eased to 8.2 percent in April-June from a year earlier, compared to a 9.1 percent expansion in the first three months of the year, according to Reuters calculations based on data from the National Bureau of Statistics (NBS).

The increase in the area of property sold also slowed to 14.1 percent in the second quarter year on year, from a 19.5-percent gain in the first quarter, Reuters calculation showed.

Real estate investment is a major driver of the economy affecting more than 40 other sectors.

Buyer demand appeared to be more resilient than expected, reinforcing analysts’ views that China’s property market is unlikely to suffer a hard landing as some have worried.

“The property market has cooled a bit but there may not be a big correction, we don’t think there are systemic risks. We are not as worried as when the curbs were put out in March and April,” said ANZ economist Betty Wang.

Real estate investment growth sped up in June after slowing in May, suggesting investment in the sector remained strong, likely due to more robust demand in smaller centres that are encouraged to reduce inventory and not subject to strict curbs seen in the bigger cities.

It accelerated to 7.9 percent in June from a year earlier, compared to a 7.3 percent expansion in May, according to Reuters calculations based on NBS data.

Property sales, measured by floor area, grew 21.4 percent, more than double the 10.2 percent increase in May, Reuters calculations showed.

New construction starts measured by floor area, a telling indicator of developer confidence, rose 14 percent in June, the highest since October 2016, according to Reuters calculations.

In spite of government efforts to curb property prices, household loans — mostly mortgages — rose to 738.4 billion yuan in June from 610.6 billion yuan in May, according to Reuters calculations based on data recently released by China’s central bank.

A survey by China’s central bank in late June showed that 31.2 percent of households expect housing prices to rise in the third quarter of this year, while 46.1 percent of households tipped them to remain basically unchanged.

Growth in inventory floor area in the first half of the year was 9.6 percent lower than one year earlier, compared with a fall of 8.5 percent in the January-to-May period.(SD-Agencies)