China home prices rose in fewer cities in July, adding to signs the property market is cooling.
New-home prices, excluding government-subsidized housing, gained from the previous month in 56 of 70 cities tracked by the government, compared with 60 in June. the National Bureau of Statistics said Friday. Prices fell in nine cities and were unchanged in five.
Data earlier this week showed new-home sales by value last month grew at the slowest pace in more than two years. Regulators have imposed a series of curbs on lending and property purchases to avert a bubble after prices jumped as much as 62 percent within a year in big cities such as Shenzhen.
Restrictions on home purchases have been spreading across the country, with cities including Ganzhou and Dongguan tightening curbs last month. China’s central bank in July cautioned on “regional bubble risks,” and reiterated a pledge to reduce new credit flowing into the property market.
“It’s about time that measures implemented in bubbly third-tier cities start to bite. Sentiment there will also cool soon,” said Alan Jin, a Hong Kong-based analyst at Mizuho Securities Asia Ltd. “Some third-tier cities implemented curbs between March and May, and we expect more cities to follow suit.”
Prices in second- and third-tier cities, which have underpinned the property market rally this year, grew at the slowest pace in five months, according to Bloomberg calculations. The largest drops were seen in Anqing and Quanzhou, where the population is less than one-quarter of cities like Shanghai.
Prices in Beijing fell 0.1 percent last month and were unchanged in Shanghai. Values dropped 0.2 percent in Shenzhen and increased 0.4 percent in Guangzhou.
“We may see a nationwide home-price decline starting in the fourth quarter, when developers weighed under a funding crunch are forced to cut prices,” China Merchant Securities analyst Zhao Ke said before the data were released.
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