BEIJING: China‘s new home prices rose at the slowest clip in six months in July, as authorities further tightened rules in the red-hot property sector, including limits on some categories of purchases.
Average new home prices in China‘s 70 major cities rose 0.3% in July from a month earlier, slowing from a 0.5% gain in June, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS).
Separate data showed property investment also rose at a slower pace in January-July from a year earlier, amid tightened financing rules.
China’s property market rebounded quickly from the COVID-19 crisis last year, triggering concerns about financial risks in an overheated market.
That has prompted authorities to step up curbs this year, including restrictions on borrowing by developers, caps on banks’ lending to the sector, guiding banks to raise mortgage rates and a crackdown on illegal funding in the market.
“In most cities, both newly built and resale homes have seen a clear slowdown in price growth,” said Zhang Dawei, chief analyst with property agency Centaline.
“The housing price growth is expected to continue to soften, as the credit policy returns to normal (from easy to tight),” Zhang said.
Last month, a top decision-making body of the ruling Communist Party repeated an earlier government warning that “homes are for living in, not for speculation”.
Authorities in the southern tech hub of Shenzhen earlier this month said that 2.155 billion yuan ($332.46 million) of loans meant for business use had been unlawfully used for home purchases.
Price growth in China’s biggest cities such as Shanghai and Beijing eased in July to 0.4% from June’s 0.7% growth, the NBS said.
In Beijing, which has China’s most stringent property curbs, residents are not allowed to buy additional homes after owning two properties.
Centaline’s Zhang said authorities had slapped a record 380 new curbs on the sector this year.
Prices in smaller tier-three cities rose 0.2% on-month, versus a 0.3% gain in June. Tier-two cities, which include some provincial capitals, gained 0.4%, slowing from June’s 0.5% rise.
In August, Jinhua, a small city in eastern Zhejiang province, and Huizhou, in southern Guangdong province, took action after the housing ministry told them to strengthen controls.
The softening has spread with 51 cities reporting month-on-month gains in July, the smallest number since January and down from 55 in June.
Compared with a year earlier, China’s new home prices grew 4.6% in July, down from a 4.7% increase in June.