Australian iron ore miners are facing significantly slower demand from China after all the key indicators for steel weakened sharply over the first quarter.

While overall economic growth was solid at 7 per cent, property sales, the area under construction and land purchases all moved in the wrong direction.

The area of land sold in the first quarter – a key indicator of future construction and steel demand – fell by 32.4 per cent from the same quarter last year.

The stock pile of new homes, yet to be sold, increased by 24.6 per cent over the same period.

That left the total area of newly completed residential property at 650 million square meters or around 6.5 million apartments.

The figures neatly demonstration the acute over-supply of property across the country, which has many forecasting iron ore demand to fall by around 5 per cent this year.

Residential property construction accounts for around 20 per cent of Chinese iron ore demand.

In a further sign of the rapidly slowing property sector the new area under construction fell by 18.4 per cent over the quarter compared to the same time last year.

This weakness saw growth in fixed asset investment rise by 13.5 per cent over the first three months of the year. This is well down on rates of growth above 20 per cent two years ago.

Industrial production was also hit by the weak property market, expanding at just 5.6 per cent in March – the market was forecasting 7 per cent growth.

China's National Bureau of Statistics said the overall growth rate was hit by sluggish corporate earning and the property downturn.

State Owned Enterprises were the hardest hit, reporting profits of just 1.7 per cent in the first quarter.

Shareholding companies fared better with profits rising 7.4 per cent, the NBS said.

Retail sales were a rare bright spot, rising by 10.2 per cent in the first quarter, compared to the same time last year.

China is targeting growth of 7 per cent this year and while it has eschewed large stimulus measure, the government has indicated it will intervene where necessary to avoid a rapid slow-down in growth.

The International Monetary Fund is expecting growth in China of 6.8 per cent this year and 6.3 per cent in 2016.

On the eve of the closely watched GDP release, China's Premier Li Keqiang said the government would step-up targeted measures to support the economy.

"We must keep a sober mind and realise that the downward pressures is increasing …and be prepared to deal with challenges from the bigger difficulty," he told a state broadcaster.

His comments followed China's central bank saying credit across the economy was being gradually tightened and demand for new loans from the real economy was declining.

The People's Bank of China said M2 or money supply over the first quarter had decline to 11.6 per cent – the government is targeting growth of 12 per cent this year.

Within this it said lending to the steel sector had declined by 5 per cent since the same time last year, while lending to construction materials was down 19.3 per cent.

Both sectors are plagued by over-capacity and the central government is trying to gradually remove out-dated and inefficient manufactures which should allow the more profitable operates to survive the downturn.