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 -- are 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.

earlier related report
Asian property market surges 59% in 2010: report
Hong Kong (AFP) Feb 18, 2011 - A massive $63 billion was spent on property transactions in Asia last year, a 59 percent rise from 2009, as the region's economies led the recovery from the global financial crisis, a report said.

Surging prices in Hong Kong and Tokyo made up almost half the total amount spent, according to the study, which comes as several Asian countries grow concerned that large inflows of foreign cash are causing asset bubbles.

The figures, from real estate consultancy CB Richard Ellis, are a huge increase from the $39.2 billion spent in 2009, when the globe's worst economic crisis since the Great Depression sent property prices sliding.

"The Asian real estate investment market enjoyed an encouraging end to the year and prices for prime investment property have now recovered substantially," said Nick Axford, the consultancy's head of research for the Asia-Pacific area.

"The market outlook remains generally optimistic," he added.

Hong Kong accounted for $15.2 billion of the total, while Japan's market saw $14.2 billion in transactions.

Prices in Hong Kong have jumped 50 percent in the past two years due to low interest rates, a strong economy and an influx of mainland buyers who make up a big proportion of purchases, especially of luxury homes.

Worries about a property bubble have prompted Hong Kong's government to announce a series of measures to cool the market, including boosting land supply and new stamp duties to keep out so-called hot money.

Asian economies have outperformed their Western counterparts in recovering from the global economic slump that started in late 2008, with cash-rich foreign investors and low interest rates stoking demand for Asian properties.

"We expect that levels of activity will increase in 2011 as both foreign and domestic investors tap into the growing pool of capital looking to secure or increase its presence in Asia," said Greg Penn, the firm's executive director of investment properties for Asia.

In 2010, investors were especially drawn to office and retail space, which accounted for $26.3 billion and $10.4 billion in transactions respectively, said CB Richard Ellis' Asia Investment MarketView report for the second half of 2010.

Activity slowed in most markets during the last three months of the year except in mainland China, Malaysia and Singapore, which notched up a quarterly record as the city state saw more than $5 billion in transactions, it said.

Transactions by institutional investors touched $13 billion in 2010, a 74 percent year-on-year increase, while investment by Asian real estate investment trusts skyrocketed 195 percent to $10.5 billion, the consultancy said.

Cross-border property investment also picked up last year, accounting for $11 billion of total transaction volumes, a 96 percent year-on-year increase but still off a 2007 peak of $27 billion, it said.

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