China urban house prices up 20 pct in 2010

BEIJING: House prices in China's major cities soared by more than a fifth last year, private research showed on Thursday, painting a picture at odds with official data following repeated government efforts to tame the red-hot sector.

Residential prices rose fastest, by 47.1%, in Hangzhou, followed by 37.9% in Chongqing and 37.1% in Beijing, according to the China Real Estate Index System (CREIS), run by Soufun, China's biggest online real estate firm.

By contrast, data from the National Bureau of Statistics showed home prices rose just 2.4% in Hangzhou, 7.9% in Chongqing and 9.1% in Beijing in the year to November. It has not published December data.

"The CREIS data is closer to actual market performance," said Chen Dong, a property analyst at BOC International in Shanghai.

The official data covers the outskirts of cities as well as affordable housing, which underestimates price rises felt by urban home buyers.

Another difference is that the official data are provided mostly by developers while CREIS collects its own data.

The CREIS data also showed sharp falls in numbers of property transactions in 2010 from 2009, by 39.8% in Beijing, 40.2% in Shanghai and 50.0% in Shenzhen.

That resulted in rising stocks of unsold residential units in many Chinese cities. The stock in Beijing stood at 101,592 units as of Thursday, Jan 6, compared with a total of 111,048 transactions in 2010.

The mounting stock, together with government tightening measures and easing expectations on property inflation, is expected to put a brake on home price inflation in 2011.

"There is not much upward momentum in property price this year, particularly in the first half," Chen said.

He and many other analysts share the view that Chinese house prices would probably dip early this year, taking some heat out of a market some fear could swell into a bubble.

China's top leaders, including Premier Wen Jiabao, recently reaffirmed authorities would step up efforts to rein in home price surges this year.

The central bank raised interest rates twice last year and economists said they expect more tightening this year. — Reuters