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 But the headline number, published by the National Bureau of
Statistics on Monday, masks China's massive property problem - a
vast amount of unsold apartments mainly in its smaller cities.
Property prices were rising fast in mega cities like southern
Shenzhen, where prices rocketed by nearly 47 percent, Shanghai, up a
healthy 15.5 percent, and Beijing, which posted a respectable 8
percent gain over a year ago.
But the recovery that began in October, after 13 months of straight
decline, has only spread to just over half the 70 cities captured by
official data, leaving others languishing far behind.
Wang Jianlin, China's richest man and chairman of property and
entertainment conglomerate Dalian Wanda Group, said on Monday that
it could take four to five years for the market to digest the
inventory in tier three and four cities.
China has some 13 million homes vacant - enough to house the
families of several small countries - and whittling down the excess
is among Chinese policymakers top priorities for 2016.
Dalian Wanda expects a significant decline in real estate income as
it diversifies its business away from property. But, planning an
initial public offering, Wang reckoned the market would manage so
long as authorities took a gradual approach to the inventory issue.
"Sales are highly concentrated in first- and second-tier cities,
where 36 top cities account for three-quarters of the total sales
value. So the portion from third- and fourth-tier cities is very
low. As long as they destock slowly, there is no problem," he told
the Asia Financial Forum in Hong Kong.
Meantime, Wang said property investment in China's first tier cities
was the most risky due to high land costs, and his firm's real
estate focus is largely on the commercial sector in the lower-tier
cities.
Still, analysts reckon it will take a lot longer before the price
recovery translates into growth in property investment that can help
the overall economy regain momentum.
"Property investment is expected to see a single-digit decline this
year despite recovering home prices, so it will continue to weigh on
GDP," said Liao Qun, China chief economist at Citic Bank
International in Hong Kong.
That will hardly dull the pain for investors worried by a
depreciation in the yuan currency and crumbling stock markets since
the start of the year.
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WHAT A DRAG
For the first 11 months of 2015, property investment accounted for
13 percent of gross domestic product. But the sector's multiplier
effect on other industries, from building materials to white goods
and furniture, means its impact on the economy is far greater.
"Looking forward, the property market would continue to drag on the
broad economy in 2016, with property investment probably showing
weak growth momentum," said Wang Jun, senior economist at the China
Centre for International Economic Exchanges (CCIEE), a Beijing-based
think-tank.
Premier Li Keqiang said on Saturday that China's economy grew by
around 7 percent in 2015.
But analysts polled by Reuters have forecast fourth-quarter GDP data
set to be released on Tuesday will show growth slipped to 6.9
percent last year, the slowest in a quarter century and down from
7.3 percent in 2014.
The poll was more gloomy about 2016, forecasting growth of just 6.5
percent.
China's sluggish domestic and external demand, weak investments,
factory overcapacity and high property inventories, have raised
expectations Beijing will reduce interest rates again, having cut
them six times since November 2014.
DRYING REALTORS' TIERS
For all the pessimism, there have been some glimmers of hope for the
economy as financial markets fret growth is slowing down too
quickly.
A surge in credit expansion in December was reported on Friday.
Nomura analysts wrote in a note that it was probably driven by an
increase in fixed-asset investment stemming from infrastructure
projects, as Beijing's fiscal stimulus started to kick in.
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