Home prices fall in more than half of Chinese cities

Prices for new homes in China fell in more than half of major cities in May from April, official data showed Monday, as the government vows to maintain controls over the property market.

Out of 70 cities tracked by the government, 43 registered month-on-month falls in home prices in May, the same number as April, the National Bureau of Statistics said in a statement.

China has implemented several measures aimed at limiting runaway property prices for more than a year, including bans on buying second homes, hiking minimum down-payments and introducing property taxes in certain cities.

But the cities that recorded rises in home prices doubled to six, including Tianjin and Dalian in the north, suggesting prices have started to rebound despite controls, analysts said.Prices were unchanged in 21 cities, the bureau said.

The government has been encouraging banks to lend to first-time home buyers while at the same time seeking to clamp down on speculative demand.China cut interest rates on June 8, which analysts believe could bring new life to the market.

"The government insists that its policy controls remain in place, but they do seem to be fraying at the edges," Capital Economics said in a research report last week.

"But neither property prices nor real estate investment are likely to experience a sharp rebound," it said. "Prices are likely to remain subdued.

"One Chinese analyst said a slowdown in property investment had limited supply, causing prices to edge higher."In general, home prices will maintain a trend of stable increases in future," Li Huiyong, a Shanghai-based economic analyst at Shenyin Wanguo Securities, told AFP.

Most Shanghai-listed property developers gained in morning trade Monday, with Guangzhou Donghua Enterprise jumping 3.85 percent to 6.48 yuan ($1.02) and Beijing Vantone Real Estate rising 1.50 percent to 4.05 yuan.

By AFP