Latest Chinese Statistics Show A Healthy Property Price Slow-Down... But Private Statistics Show A Price Explosion

Leaning Tower China

Chinese property prices were just 9.3% year over year in August, according to a survey of 70 cities performed by China’s National Bureau of Statistics. This latest result implies a healthy deceleration for China’s property prices.

Bloomberg:

The 9.3 per cent increase in August was the slowest pace in eight months and less than the 10.3 per cent increase in July and the median 10 per cent estimate in a Bloomberg News survey of eight economists.

Thing is, the latest data doesn’t seem to jive with anecdotal reports from the property industry:

The value of August sales rose about 15 per cent to 353.3 billion yuan ($52.1 billion) from July and the volume increased 6 per cent, today’s data showed. China Vanke Co., the nation’s largest listed developer, reported a 149 per cent jump in August sales from a year earlier, and Poly Real Estate Group Co., the second largest, said sales almost doubled.

Today’s data “may not be consistent with the latest phenomena of surging home sales and record price for land sales,” which may “rekindle the debate on the quality of housing data,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd.

There’s a huge discrepancy between different data sources:

Data compiled by Soufun.com, the nation’s largest property website, showed housing transactions in Shenzhen surged 84 per cent last month from July and rose 23 per cent in Beijing. Prices in Beijing gained 12.3 per cent in August over the previous month and rose almost 7 per cent in Shenzhen, according to Soufun. By contrast, the statistics data today showed new home prices in Beijing stayed unchanged from July and costs in Shenzhen dropped 0.3 per cent.

To be fair, however, some Chinese surveys can be distorted by the mix of high-end vs. low-end properties sold during a period, or within their sample size. A property portal is also biased to show rapid price appreciation, just as the government may be biased to show that the market is cooling as intended. Time will tell who is correct.

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