China’s real estate sector is important. At home, rising property prices are the focus of attention for China’s chattering classes, and a potential source of social unrest. Abroad, markets regard real estate investment as a key part of China’s growth story, and the global demand picture for iron ore and copper markets.
- Eugene Hoshiko/Associated Press
With all this attention on China’s real estate sector, it is disappointing, but perhaps not surprising, that the quality of the data is so weak. Data on national property prices from China’s National Bureau of Statistics (NBS) has been widely criticized – by experts and the public – for understating the true level of increases.
Data on 2009, which showed prices up just 1.5% for the year, was so out of line with the public perception that it sparked a firestorm of criticism. In 2010, its credibility in question, the NBS promised to do better. Today’s data (in Chinese), which covers property prices in January, represents their attempt to make good on that promise. The results leave something to be desired.
Yes, the NBS has moved away from a system where dodgy local officials are involved in the survey, and that should put the data on a firmer footing. But the NBS has also ceased publication of the national average, and by doing so removed the most straightforward, widely followed, and easily understood data series on China’s property market.
The justification offered by the NBS is that a national average obscures important city level differences, and moving away from a national figure will focus more attention on the reality of local variation. That explanation holds little water. The bureau’s own data show that 68 of the 70 cities in the sample saw prices rising over the last year. A national average would capture that trend – not disguise it.
And even under the new system, the city level data appears far from perfect. A comparison of the NBS data for major first and second tier cities with data collected by private property research firm Soufun suggests that for many cities the official data continues to understate the extent of rising prices.
-For Shanghai, the NBS claims that prices in January were up 1.8% from their level a year earlier. Calculations based on the Soufun data suggest that prices rose by 23%
-For Guangzhou, the NBS sees just a 0.1% increase in prices, the Soufun data points to increases of 31%
With both Soufun and the NBS drawing on transactions data collected by local property bureaus as the basis of their statistics, the difference is hard to explain.
For the government, the private data suggests that the work of pricking China’s property bubble has only just begun. For China’s would be home-owners, and for investors focused on China’s bubbly real estate sector, a decent set of official data still seems like a distant prospect.
– Tom Orlik
This article is generally saying that the housing data collected by NBS is not accurate. It compare NBS and private property research firm to highlight the huge difference on the data.
I honestly didn’t really understand what this article was trying to tell us, but what i got from it is that China is basically going through what the US is, with their real estate issues. However it is more important for China’s issues to start looking up sooner than later because their population is growing and they are so cramped up. However, it seems that isn’t going to be happening anytime soon.