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--December New Home Prices Up 0.5% M/M, Up 5.8% Y/Y
     BEIJING (MNI) - China new home prices gained at the fastest pace in five
months in December, data released Thursday showed, signalling the impulse to
purchase property is overcoming the myriad curbs imposed by authorities
concerned with excessive speculation.
     Average price of new homes for 70 cities monitored by the National Bureau
of Statistics rose 0.5% on month in December, up from the 0.4% rise in November
and was the biggest month-to-month gain since July, according to MNI's
calculations based on NBS data. The survey excludes government-subsidized
housing.
     A multi-year boom in China's property market prompted the central
government to issue a series of restrictions to prevent a bubble that may
destabilize the economy. Third-party data show China's property market
contributes at least one fifth to GDP growth.
     December's housing prices were 5.8% higher than a year ago, compared with
the 5.5% annual gain in November.
     --ONGOING DEMAND
     Strong demand and increased speculation continue to drive growth, said Yan
Yuejin, director of the E-house Real Estate Research Institute, in a note. "Some
high-priced housing projects are entering the market, driving up prices," he
said.
China: Residential Property Prices - Average Price Increases
Average Price Chg %           Dec   Nov  Oct   Sep   Aug   Jul   Jun   May   Apr
--------------------------------------------------------------------------------
15-Top cities            M/M  0.1   0.0  0.0  -0.2  -0.2   0.0   0.0   0.0   0.1
                         Y/Y  0.0  -0.2  0.3   2.1   6.9  11.1  13.6  16.2  19.0
70-Large and medium
Cities                   M/M  0.5   0.4  0.3   0.2   0.2   0.5   0.7   0.8   0.7
                         Y/Y  5.8   5.5  5.7   6.5   8.2   9.3   9.6   9.7   9.9
     
Source: MNI - MNI Calculation from National Bureau of Statistics of China
     Last week, MNI, along with Chinese local media, reported that authorities
in cities including Lanzhou are loosening controls on the property sector
despite a central government emphasis on maintaining current property policies.
The housing ministry has since denied such reports as "misinterpretations" of
local authorities efforts to control the market.
     New home prices showed month-on-month pick-ups in 57 of the 70 cities
surveyed in December, compared with 50 in November that reported gains. 
     Gains in average new home prices in the 15 largest cities accelerated
slightly, up 0.1 percentage point m/m from November.
     Within the four largest cities, or the so-called Tier-1 cities, Shanghai
and Guangzhou reported price gained 0.2% and 5.5% y/y, while Beijing and
Shenzhen saw new home prices dip by 0.2% and 3%, NBS data show.
China: Residential Property Prices - No. of Cities where Prices are
Rising/Falling
No. Cities Rising/Falling            Dec  Nov  Oct  Sep  Aug  Jul  Jun  May  Apr
--------------------------------------------------------------------------------
15-Top cities M/M              Rise    8    4    3    0    0    5    6    6    6
                               Fall    4    7    9   11   12    7    5    6    5
                                Net
                               Rise    4   -3   -6  -11  -12   -2    1    0    1
70-Large and medium Cities
M/M                            Rise   57   50   50   44   46   56   60   56   58
                               Fall    7   10   14   18   18    9    6    9    8
                                Net
                               Rise   50   40   36   26   28   47   54   47   50
15-Top cities Y/Y              Rise    6    4    5   12   13   15   15   15   15
                               Fall    9   11   10    3    2    0    0    0    0
                                Net
                               Rise   -3   -7   -5    9   11   15   15   15   15
70-Large and medium Cities
Y/Y                            Rise   61   59   60   67   68   70   70   69   69
                               Fall    9   11   10    3    2    0    0    1    1
                                Net
                               Rise   52   48   50   64   66   70   70   68   68
     
Source: MNI - MNI Calculation from National Bureau of Statistics of China
OTHER KEY HIGHLIGHTS: 
     - The cities that saw the highest y/y price growth were Beihai (+13.2%),
Xi'an (12.2%) and Shenyang (11.5%). The highest m/m growth rates were seen in
Kunming (2.6%) and Haikou (2.2%).
- On year price growth expanded in Tier-2 cities by 0.4 percentage point, while
Tier-1 cities saw a contraction for the 15th consecutive month due to strictest
controls being imposed in these four cities. It was flat across Tier-3 cities.
- Housing prices in Tier-1 cities were dampened due to the strictest controls,
while Tier-2 cities saw a pick-up in speculative activity, with housing prices
up 0.6% m/m and higher by 0.4 percentage point y/y from Nov. Tier-3 cities,
boosted by the spillover effect from higher-tiered cities, were 0.5% higher m/m,
though flat on an annual basis. 
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com
[TOPICS: MAQDS$,M$A$$$,M$Q$$$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com