MNI DATA ANALYSIS: China New Home Price Jump Defies Govt Curbs

--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

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