BEIJING: The cost of Chinese new homes rose at a slower rate in June from the previous month, figures showed on Friday, as measures to tame prices in the world’s second-largest economy took hold.
The average price for new houses in 100 major cities increased 1.32 percent month-on-month in June to 11,816 yuan ($1,776) per square meter, the China Index Academy (CIA) said in a statement, down from April’s 1.7 percent.
“The effect of tightening policies in some key cities gradually kicked in and transactions in the cities further fell in June,” said CIA, the research unit of real estate website operator Soufun.
The once red-hot property market is a key driver of Chinese growth but has had a spell in the doldrums more recently, with new buyers priced out despite government borrowing restrictions reining in soaring costs.
Beijing has introduced several policies to try and stabilize the real estate sector as economic growth weakened, including lowering minimum downpayment requirements, cutting transaction taxes and providing incentives for migrant workers to buy homes.
The policy loosening led prices in some big cities, including Beijing and Shanghai, to spike this year as pent-up demand was unleashed, but at the same time the country has a huge inventory of unsold new homes, mostly in third- and fourth-tier cities.
The government has vowed to take “specialized” measures to tackle diverging trends in different regions.
Hefei, capital of the eastern province of Anhui and where property price rises have been among the fastest, has raised downpayment requirements on second homes and tightened mortgage policies from this month, Chinese media have reported.
Year-on-year, new home prices in China were up 11.18 percent last month, compared with 10.34 percent in May, the CIA said.
Entrenched by a slowing property market, a sluggish manufacturing sector and mounting debt, China’s economy grew only 6.9 percent in 2015, its weakest rate in a quarter of a century, and concerns about its slowdown have roiled global markets.