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The Jump in China's Housing Starts Could Be a Huge Head Fake

Local governments may be hitting up developers for revenues, Macquarie says.
Construction At The Stonecutters Island Sewage Treatment Works
Photographer: Justin Chin/Bloomberg

At first glance, it makes perfect sense: Chinese property sales surged in March, and new housing developments rose in tandem with resale activity.

But a peek under the hood from Macquarie Capital Ltd. analysts led by Ian Roper suggests there's reason to be skeptical about China's presumptive rebound in residential investment.