Home prices in nearly two thirds of China’s major cities fell in February from the previous month, the government said on Sunday, as moves to cool the red-hot property market continue to bite.
Of the 70 large and mid-sized cities tracked by the government, 45 saw new home prices fall month-on-month, the National Bureau of Statistics (NBS) said in a statement, down from 48 in January.
Prices in a further 21 cities were stable and just four cities experienced price rises, it added.
Beijing has introduced a range of measures aimed at curbing runaway property prices over the past year, such as bans on buying second homes, hiking minimum down-payments and introducing property taxes in select cities.
But analysts now worry that slumping home prices could hurt growth in the world’s second-largest economy, which is already forecast to slow this year from 9.2 percent growth in 2011.
The government, however, has said it has no plans so far to relax policy restrictions aimed at cooling the market.
“China’s property prices will likely continue their downward trend, likely going into the second half of 2012 and until policies are altered,” property analysts EC Harris said in a research note.
“Even if there are concerns on the economic slowdown in China, we expect the… Chinese leadership to maintain its tightening measures at least until the latter parts of 2012.”
According to the NBS, prices of newly built homes fell in February on a year-on-year basis in 27 of the 70 cities surveyed – higher than the 15 cities that recorded price drops in January.
Property developers have been hit hard by the tightening policies and a lack of funds after the government hiked interest rates and restricted bank lending to rein in surging inflation and cool real estate prices.
In February, China moved to ease restrictions on lending by trimming bank reserve requirements, but the property industry is waiting to see if the government might relax measures aimed specifically at the sector.