Data holes and short history make Chinese property market a puzzle

As China loosens policies to arrest a slowdown in property investment and the broader economy, debate has heated up over whether such efforts will add pressure to a housing market that many have called a bubble.

The slide in investment has Beijing worried enough to relax monetary policy. But policymakers should also be mindful that housing prices have hardly fallen from their peak, say analysts with a bearish view.

Andy Xie, a former Morgan Stanley economist now with Rosetta Stone Advisors in Shanghai, has for years been predicting a fall of up to 50 per cent in housing prices.

The media have also widely reported on the spread of dozens of ghost towns across the nation.

Debate over whether the market is in a bubble - and the consequences of a collapse in prices - has been simmering for a decade.

Still, some analysts take a more sanguine view, saying that a consolidation in prices will help the market to emerge on a more stable footing.

Scenes of miles upon miles of empty homes in Zhengzhou in CBS network's 60 minutes programme painted a graphic picture of oversupply when the report aired in March 2013 - at the onset of the current market downturn. Two years later, Andy Rothman, Matthews Asia investment strategist and formerly a CLSA economist, saw much busier roads and improving infrastructure when he visited the same area of Henan's capital that featured in the top-rating US show.