BEIJING (Reuters) - China's real estate investment growth continued to slow in the first seven months of 2015 due to weak new construction, but property sales and housing investment improved, indicating a mixed recovery in the struggling property market.
Property investment, a main driver of the economy, grew 4.3 percent in the January to July period from a year earlier, the slowest rate since the March quarter of 2009, data from the National Bureau of Statistics(NBS)showed on Wednesday.
Wednesday's weak property investment data is a bad omen for China's economic growth, which has stalled as low overseas demand cut into exports and industrial production, prompting the People's Bank of China to devalue the yuan on Tuesday.
A year-long slump in the housing market has dragged on the economy, which is widely expected to post its worst performance in a quarter of a century this year.
Weak property investment is expected to continue this year as a huge overhang of unsold houses deters developers from starting new construction, analysts said.
"There are no obvious recovering signs in the land market and new construction, especially in second- and third-tier cities. So investment will keep its single-digit growth rate for a period of time," said Jeffrey Gao, head of China Property Research at Nomura in Hong Kong.
New construction fell 16.8 percent during the January to July period from a year ago, worsening from a 15.8 percent annual drop in the first half, the NBS data showed.
Property sales picked up again after a barrage of government support measures. The official data showed the total floor space sold in the first seven months rose 6.1 percent during the January-July period, up from a 3.9 percent increase in January to June.
There was good news in quickening pace of housing investment, which increased 3.0 percent in the January to July period from a year ago, faster than a 2.8 annual growth in the first half, the NBS data showed.
That rise marked the first increase in investment growth since December 2013. Housing investment accounted for 67.3 percent of China's total property investment.
"The recovery of housing investment growth will fuel the growth of total property investment in coming months," Li Jiao, senior statistician at NBS, said in a statement accompanying the data.
China's top economic planner said on Monday that the property market was likely to continue to improve in the second half of this year, a good sign for the economy.
Beijing has rolled out a series of measures since September to make it easier for people to buy second homes, and four cuts to benchmark interest rates since November have also helped to bolster market sentiment.
Reporting by Xiaoyi Shao; Editing by Eric Meijer