(Yicai Global) Aug. 15 -- China's housing market remains stable overall and is moving in a positive direction, with inventories falling to a 50-month low, analysts said.

Though no sign of loosening real estate policy looms, property investment and sales have improved moderately, with investment growth rising 0.5 percentage points to 10.2 percent in the first seven months and the housing market remaining stable overall, state Securities Daily quoted Zhang Jun, chief economist at Morgan Stanley Huaxin Securities, as saying yesterday.

China's property destocking process has been completed, with inventories falling to a 50-month nadir, according to data from Centaline Property Research Center.

The amount of commercial housing for sale was 544 million square meters as of the end of last month, down 6.6 million square meters from a month earlier. The floor space of homes, office buildings and commercial properties for sale fell by 5.44 million square meters, 400,000 square meters and 480,000 square meters, respectively, according to the country's National Bureau of Statistics.

Property development investment data are one of this year's strongest, Yan Yuejin, research director at Shanghai E-House Real Estate R&D Institute's Think Tank Center, said yesterday. Despite tight controls on home sales across China, performance on the supply side is very good, with investment rising rather than falling. Property development investment is still growing at a double-digit pace, suggesting it is a bit too high. An important factor is that authorities are urging developers to use idle land to break ground on new homes, which will lead to robust realty investment figures and contribute to the country's restocking efforts.

Commodity housing sales are strong and national property sales data are following a U-shaped trend, suggesting that market cooling is fading and transactions are likely to rise, Yan said. Commodity housing sales were up 4.2 percentage points annually in the first seven months, suggesting scope remains for home sales to rebound. A slowdown in the pace of pre-sale permit issuances failed to dampen home sales, which seem set to remain strong in the second half.

China's property development investment grew 10 percent annually to CNY6.6 trillion (USD956 billion) in the first seven months, up 0.5 percentage points from the pace in the January to June period, NBS data show. The floor space of commercial housing sold in the first seven months was 900 million square meters, up 4.2 percent on the year, as growth increased 0.9 of a percentage point from January to June.

The floor space of properties for sale fell 14.3 percent annually last month, meaning inventories are falling, though at a slower rate, Yan said, adding that data on floor space of properties for sale is very regular.

Editor: Ben Armour