China’s property prices continue to slow in July

KUALA LUMPUR: Property prices in China at a slower pace in July from the previous month, government data showed on Tuesday, Aug 10,  as efforts to curb speculative investment in the real estate sector started to bite.

Housing prices in 70 major cities rose 10.3% on year in July, the National Bureau of Statistics said, down from 11.4% in June.

The figure marked the third straight month that year-on-year growth in prices has slowed after Beijing issued a slew of measures to prevent the real estate sector overheating and causing a bubble that could derail the economy.

Prices rose 12.8% in April, the biggest on-year rise for a single month since July 2005, when the survey was widened to 70 cities from 35.

On a monthly basis, property prices were unchanged from June, the statistics bureau said.

Total floor space – commercial and residential – sold last month fell 15.4% year-on-year to 64.66 million square metres (700 million square feet), the data showed.

The value of sales fell 19.3% on-year to 306.6 billion yuan (RM142.82 billion).

“House price inflation is slowing and should continue to ease further in the months ahead, but so far it has been a gradual deceleration rather than an abrupt correction in prices,” said Brian Jackson, senior analyst at the Royal Bank of Canada in Hong Kong.

In recent months, authorities have tightened restrictions nationwide on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down-payments for second homes.

Despite signs the sector is cooling, the government said last month it has no plans to ease restrictions on the market.

Rising property prices have stoked fears of a bubble in the sector, prompting regulators to ask banks to test the possible impact of a 30% price drop. -- South China Morning Post
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