BEIJING (Reuters) - Growth in China real estate investment slowed further in the first 10 months of 2014, but property sales showed some signs of improvement, indicating Beijing's efforts to boost the sector may be starting to have an effect.
Property investment, which affects more than 40 other sectors from cement to furniture, grew at its slowest pace in over five years between January to October, rising 12.4 percent in that period from a year ago, the National Bureau of Statistics(NBS) said on Thursday.
That compared with an annual increase of 12.5 percent in the first nine months and marked the slowest pace of growth since July 2009.
"The easing of property investment growth has continued to drag on China's broad economy," said Du Zhengzheng, an economist at China Development Bank Securities in Beijing.
"We expect the trend will continue in coming months even though sales picked up."
The NBS data showed property sales dropped 1.6 percent in October in terms of floor space, easing substantially from a 10.3 percent drop in September.
That came after Beijing announced fresh steps in late-September to support the sluggish property market, including mortgage rates and downpayment levels for some home buyers.
The NBS data also showed mortgage loans to home buyers dropped 4.3 percent in the first 10 months of 2014, easing from the drop of 4.9 percent in the January-September period, as banks quickened their mortgage approvals and started to provide preferential rates to some home buyers.
Still, analysts doubted whether the government moves in late September would stem the slide in the property market as a glut of unsold homes hangs over the market. Many see the sector remaining weak well into 2015.
Moody's investors Service said on Wednesday that the outlook for China's property industry remains negative as it expected property sales would continue to decline in 2015 on high inventory levels and tight liquidity.
As the sector accounts for more than 15 percent of China's annual economic output, the prolonged cooling of the housing market poses the biggest risk to the world's second-largest economy, even as Beijing tries to stimulate overall growth, economists said.
A private survey showed home prices in China dropped for a sixth consecutive month in October, pointing to a persistent property downturn.
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Kim Coghill)