China’s new-home prices rose at a slower pace in more cities last month as developers offered discounts and the economy slowed, prompting the easing of property curbs in some places.
Prices last month climbed in 44 of the 70 cities tracked by the government compared with 56 cities in March.
Last month showed the fewest cities with price gains since October 2012 when increases were recorded in only 35 cities on a monthly basis.
Home-price growth moderated both in first-tier and less affluent cities. Prices in Beijing rose 0.1 percent from March, the Chinese National Bureau of Statistics said in a statement yesterday, the slowest since September 2012, while Shanghai prices increased 0.3 percent, the smallest gain since November 2012.
The eastern city of Hangzhou had the largest decline last month among cities tracked, with prices falling 0.7 percent from a month earlier.
“We’ll see more relaxation of policies in the coming months because local governments will have more incentive to do this as the market slides further,” Ding Shuang (丁爽), Hong Kong-based senior China economist at Citigroup Inc, said in a telephone interview yesterday.
He added that home-purchase restrictions should be relaxed to increase demand.
The central bank on Tuesday last week called on the biggest lenders to accelerate the granting of mortgages after sliding home sales and property construction helped drag the world’s second-largest economy to its slowest pace in six quarters in the first three months of this year.
Developers, including China Vanke Co (萬科) and Greentown, have reduced their property prices since March to lure homebuyers, according to China Real Estate Information Corp (中國房產信息集團).
Home sales fell 18 percent last month from March, the statistics bureau reported two weeks ago, and private data also showed the housing market is cooling.
Prices climbed 9.1 percent last month, slowing for a fourth month, according to SouFun Holdings Ltd (搜房), China’s biggest real-estate Web site.
At least six smaller Chinese cities have started relaxing local curbs on speculative and investment-driven home buying since last month.
Henan Province’s Zhengzhou issued draft rules to promote home purchases by low-to-middle-income households, according to a statement posted on the government’s Web site on May 7.
Prices were unchanged in 18 cities from a month earlier.
New-home price gains in first-tier cities also slowed from a year earlier.
Housing prices in Guangzhou Province’s Guangzhou and Shenzhen, each rose 11 percent from a year earlier, and prices in Beijing jumped 8.9 percent.
All three cities recorded the slowest pace since March last year.
“The only effective measure to ease the housing downturn is to reaccelerate, or at least stabilize, credit growth,” Yao Wei (姚煒), China economist at Societe Generale SA in Hong Kong, wrote in a report on Tuesday.