China says newly calculated data show property prices rose in most of its cities in January despite renewed efforts to cool the overheated market, with the biggest increases in smaller cities.
The National Statistics Bureau released data for 70 of the country's largest cities Friday that showed prices declining from a year earlier in only two cities and unchanged in five. It said that compared with December, 10 cities saw increases of 10 percent or more.
News this week of a change in how the data are reported raised eyebrows given its timing, since the trend of increases has remained stubbornly high despite various moves to discourage speculative property investments, including higher required down payments and limits on some types of purchases.
Shanghai and the southwestern city of Chongqing recently imposed taxes on property purchases, raising costs for new buyers.
This week, Beijing announced it will limit the number of homes each family can buy, prohibiting new home purchases by Beijing families who already own two or more apartments and by non-permanent residents to have at least one apartment.
But such moves do nothing to alleviate the lack of good investment options for Chinese families looking for higher returns on their savings than what they can get from bank deposits.
In cities like Beijing, prices have shot up to more than 20,000 yuan ($3,000) per square meter, putting new homes out of the reach of many ordinary families, despite strong growth in personal incomes.
Under the old system of data reporting, home prices in 70 major Chinese cities rose 6.4 percent in December from a year earlier, and 0.3 percent from November.
Many familiar with the housing market said the average price data distorted the trends and sometimes understated increases because of the inclusion of figures for all sorts of properties, including farm houses, in widely diverse regions.
Analysts said the shift to the new calculation was expected and should provide a more accurate picture of market trends than the previous method.
"This improvement was delayed. It was supposed to happen a long time before," said Wang Qinwei, an analyst at Capital Economics in London. "For analysts, it's not a big change. People generally don't trust national data."
China's economic statistics have improved in recent years but still are viewed with skepticism by many experts. The government also announced this week a recalibration of its inflation figures to better reflect consumer buying patterns, it says.
Property prices previously were calculated using a national average drawn from a survey of property developers. The new figures do not include a monthly national average price measure, but measure changes in prices based on data from government data registries.
The data showed prices for newly built housing increasing 6.8 percent in Beijing compared with a year earlier, while prices rose 1.5 percent in Shanghai. The largest increases were seen in provincial cities like southern Hainan Island's Haikou and Sanya, where they surged 21.6 percent and 19.1 percent, respectively. Further north, prices jumped 12.3 percent in central China's Ganzhou and 14.2 percent in Yueyang.
With property buying in the biggest cities subject to various limits, some Chinese are looking to provincial growth centers for investment, pushing prices higher in places like Yueyang, a city on scenic Dongting Lake in Hunan province, and Ganzhou, a city in southern Jiangxi province that has become a magnet for manufacturers looking to cut costs by moving north from the export processing zones in Guangdong province near Hong Kong.
By summarizing broader trends while providing more details of data for specific cities and specific types of housing, the government may manage to provide a clearer picture of how the market is evolving, said James MacDonald, head of research for Savills China in Shanghai.
"It isn't that the (previously reported) figures were accurate and the government decided to change them to mislead people," he said, noting that most people working in the industry were already using different, mostly locally reported data for their analysis.
Still, people are bound to remain skeptical given the lack of transparency over how such changes are decided, said Yi Xianrong, an economist at the Chinese Academy of Social Sciences' Finance Research Center.
"To be honest, no one knew where those original figures came from, so there were many suspicions," said Yi. "The inflation index faces similar questions about the transparency of the sources of the information."
"It might be to early to say it's an improvement. We'll see," Yi said.
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