Growth in new home prices slowed in China in July with Beijing prices down for a second straight month, reinforcing expectations of further slowing later this year.
Government restrictions to keep prices in check weighed on larger cities, with July showing the slowest growth since August 2016. Smaller centres pulled back but remained robust. New home prices growth in Tier-3 cities fall to 0.6 percent from 0.9 percent in June, the National Bureau of Statistics (NBS) said in an analysis accompanying the data release.
New home price growth in China`s top-tier cities were unchanged from June, while growth in Tier-2 cities fell 0.2 percentage points to 0.4 percent, the NBS said.
Retreating prices, accompanied by slowing property investment and sales, could denote a moderating property market that is unlikely to suffer the steep correction some had feared.
But many analysts expect the sector to lose more momentum in the second half of the year in the face of continuous policy tightening and an official financial deleveraging campaign.
July`s weaker-than-expected economic data suggest the economy is starting to cool under the weight of higher financing costs and a slowing property market. [nL4N1L01ZZ]
In China`s biggest markets, Beijing`s new home prices fell 0.1 percent in July, after decline 0.4 percent in June. Shanghai prices stalled while Shenzhen prices fell by 0.2 percent from a month ago.
Average new home prices in China`s 70 major cities rose 0.4 percent in July from the previous month, slowing from the 0.7 percent growth in June as policymakers battled to rein in the red-hot market.
Compared with a year ago, new home prices rose 9.7 percent in July, easing from a 10.2 percent gain in June and marking the slowest growth since August 2016, Reuters calculated from National Bureau of Statistics (NBS) data.
The NBS said at a briefing in Beijing on Monday that speculative property purchases had been effectively controlled and the overheated property market had cooled somewhat, adding that the housing market should still be able to maintain stable growth.
A rampant property boom that has spread since late 2015 from China`s biggest cities to smaller centres has prompted Chinese authorities to impose a range of measures to deflate the housing bubble as financial risks accumulated.
But speculators have instead flocked to China`s less-restricted smaller cities and their massive overhang of unsold housing, which could worry policymakers who want to keep the property market stable ahead of a once-in-five-years Communist Party congress later this year.
Household loans, mostly mortgages, fell to 561.6 billion yuan in July from 738.4 billion yuan in June, according to Reuters calculations based on the central bank`s data.
But household loans as a proportion of total new loans rose to 68 percent, from 48 percent in June, suggesting banks were more exposed to the property market, even though it cooled in July.
Policymakers have prioritised stabilising the property market ahead of the party reshuffle, reiterating the need to avoid dramatic price fluctuations that could threaten the financial system and harm social stability.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)