BEIJING: China‘s new home price growth slowed for the first time since November last year in month-on-month terms, data showed on Thursday, as government measures to cool a hot housing market finally triggered a weakening in gains.
Average new home prices in 70 major cities grew 0.5% in June from a month earlier, down from a 0.6% rise in May, according to Reuters calculations based on data released by the National Bureau of Statistics.
Tightening credit conditions and existing curbs have helped rein in rising housing prices, said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.
Compared with a year earlier, new home prices rose 4.7%, down from a 4.9% uptick in May in the first slowdown since December last year.
With policy tightening on developers’ financing and tight credit quotas, China’s real estate investment also rose in June at its weakest pace this year, a separate set of official data showed on Thursday.
China’s property market has rebounded quickly from the covid-19 shock early last year, raising concerns about financial risks and overheating.
Late last year, authorities began stepping up curbs on the sector, including restricting debt accumulation by developers, capping banks’ lending to the sector and guiding banks to increase mortgage rates.
But the moves are starting to drag on the property sector, a vital source of growth for the economy.
“Housing price growth is expected to soften in the future with ongoing tight credit and the possibility of more cities implementing pricing reference for resale homes,” said Xu Xiaole, analyst at Beike Research Institute.
Despite a flurry of cooling measures, head of China’s banking and insurance regulator Guo Shuqing warned last month that local real-estate bubbles remained serious.
The NBS data also showed 55 cities reported monthly gains, falling from 62 in May, and the fewest since January.