China says home prices in most major cities rise

BEIJING: Home prices in most major Chinese cities rose in January, the government said Friday, in its first such announcement since changing the way it publishes the cost of property across the country.

The National Bureau of Statistics said Wednesday it would stop publishing its much-watched average national property price index of the 70 biggest cities, which helped fuel public anxiety over inflation.

The new index instead provides only data on individual cities, omitting the national average.

But the latest price rises under the new system suggest Beijing's battle to bring costs under control, such as interest rate hikes and raising the amount of money banks must hold in reserve, is not having the desired effect.

The bureau said Friday that prices of newly-built homes in 68 out of the 70 cities included in the survey increased in January from a year ago.

Haikou, capital city of the southern island province of Hainan, saw the biggest growth with a year-on-year rise of 21.6 percent, it said.

Prices in Beijing and Shanghai, meanwhile, rose 6.8 percent and 1.5 percent, respectively.

It said the new methodology would help consumers and policy-makers better understand price changes in their cities through more complete and locally focused data.

But scepticism has emerged that the move was made more to help tamp down concern over skyrocketing real estate prices and high consumer prices.

"I think the National Bureau of Statistics ceased publishing the average national index in a bid to reduce public pressures," said Yang Hongxu, an analyst with E-House China R&D Institute in Shanghai.

Ever fearful of inflation's historical potential to spark social unrest, Beijing has taken several policy steps to rein in consumer prices and tame the red-hot real estate sector, including a third interest rate hike in four months last week.

Even the earlier national property-price index had been criticised for understating the severity of the country's property inflation by diluting the large rises in big cities with tamer changes in smaller ones.

The last index under the old system showed property prices rose 6.4 percent year on year in December, despite policy measures such as higher down-payment requirements and bans on second and third-home purchases in some cities.

Independent estimates have generally shown greater increases in property prices than reflected under the earlier index.