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China home prices fall slower than expected

BEIJING--China's home prices fell at a slower rate in August than the previous month, an independent survey showed Monday, as more local governments loosened purchasing restrictions to prop up sales.

The average price of a new home in 100 major cities was 10,771 yuan (US$1,752) per square meter last month, down 0.59 percent from July, the China Index Academy (CIA) said in a statement.

It was the fourth month-on-month decline in a row, but the rate of the fall was slower than the 0.81 percent recorded in July, according to CIA data.

All of China's 10 biggest cities continued to post month-on-month decreases, with the average price in Beijing dropping 0.05 percent to 32,719 yuan per square meter.

“Property developers stepped up sales promotions and some cities scrapped purchase restrictions to stimulate demand, thus transactions rebounded in the short-term,” said CIA, the research unit of real estate website operator Soufun.

In recent years China has sought to rein in runaway property prices — a source of discontent among ordinary citizens — by introducing market control measures. Among them are buying limits on second and third homes, higher minimum down-payments and taxes in some cities on multiple and non-locally owned homes.

But local governments make much of their income from land sales to developers and have sought to find ways to loosen the restrictions as property prices have fallen in the past few months.

The city of Hohhot in the northern region of Inner Mongolia in June became the first to drop restrictions on the purchase of second homes, and by Monday 37 out of the 46 municipalities that had imposed the policy had followed suit.

The central government last month published a draft of long-awaited property registration rules, a move that could reduce scope for speculation and pave the way for nationwide real estate taxes.

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