Graphics: GT

China's home sales and real estate investment both witnessed a severe slowdown in the first five months of 2014, official data showed Friday, weakening the foundations of the country's economic recovery.

Sales revenue of commercial residential homes fell 10.2 percent year-on-year from January to May, compared to a 9.9 percent drop during the January-April period, the National Bureau of Statistics (NBS) said in a statement on its website.

As home sales weakened, the country's investment in real estate development rose 14.7 percent year-on-year to 3.07 trillion yuan ($490 billion) in the first five months, a slowdown of 1.7 percentage points from the first four months and the lowest growth rate since August 2009, according to the NBS. 

"The sluggish housing market has made property developers cautious to invest and replenish their land banks," Zhang Hongwei, research director with Shanghai-based property consultancy ToSpur, told the Global Times on Friday.

The Shanghai Planning, Land and Resources Administration Bureau announced Wednesday that it had stopped the auction of a land parcel for commercial and residential use in Fengxian district. Data from real estate portal soufun.com showed that no potential buyer had showed interest in bidding for the land.

Land sales in China's 300 major cities totaled 137.5 billion yuan in May, down 38 percent from a year earlier, according to China Index Academy, adding to signs of the cooling land market.

Analysts said mini-stimulus measures recently launched by the State Council, including the targeted reserve requirement ratio cuts for some banks, are not likely to boost the property market.

"Given the limited growth of mortgage lending in May, we believe that the real estate sector is not the beneficiary of the targeted credit loosing," Xu Gao, chief economist with China Everbright Securities Co, told the Global Times on Friday.

"As the property market lacks growth momentum, local governments will continue to face pressure of gaining revenue from land sales," he added.

The slowdown in China's real estate investment also dragged down the country's fixed-assets investment, the pillar growth engine. But they still rose 17.2 percent year-on-year in the first five months, 0.1 percentage points lower than that for the first four months, data from NBS showed.

However, there are still signs of a stabilizing economy. The industrial added-value output rose 8.8 percent in May from a year earlier, accelerating by 0.1 percentage points from the April figure. Electricity output also increased by 5.9 percent year-on-year in May, the second highest growth rate so far this year, according to the NBS.

China's economy has shown signs of stabilization boosted by policy-driven infrastructure investment, but the foundation of the economic recovery is very fragile because of the real estate sector's downward pressure, Xu said.

During an economic work conference chaired by Premier Li Keqiang on June 6, he stressed that China will achieve its economic growth goal of 7.5 percent for this year despite facing downward pressure.

Both new yuan bank loans and money supply growth in May surpassed market expectations by reaching 870.8 billion yuan and 13.4 percent year-on-year respectively, data from the central bank showed Thursday.

Chinese authorities are likely to further loosen the monetary policy and regulation in the real estate sector to bolster short-term economic growth, Xu noted.