Home price growth slows, further moderation eyed

BEIJING - Home price in major Chinese cities grew at a slower pace in February, with fewer cities seeing month-on-month price rises, official data showed on Tuesday.

Last month, new home prices in 70 major cities tracked by the National Bureau of Statistics (NBS) rose by an average of 11.1 percent year on year, slowing by 1.3 percentage points from January, the NBS said in a statement.

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Prices for existing homes rose 6.4 percent year on year, compared with an average growth of 7.4 percent in January, according to the statement.

Month on month, 57 out of the statistical pool of 70 cities saw rises in new home prices, fewer than 62 cities in January. Prices dropped in four cities and stayed unchanged from a month ago in the other nine cities.

For existing homes, prices increased in 46 cities month on month, down from 48 cities in the previous month. Prices dropped in 15 cities and remained flat in nine cities, the NBS said.

"The deceleration in home price growth was partly due to tapering pent-up demand after rapid home sales growth in 2013," said Lu Ting, chief China economist with Bank of America Merrill Lynch.

Moreover, tight mortgage conditions and higher second-home mortgage down payments in many major cities could also have weakened property demand, Lu said.

A slowing trend of home price increases became clear in January, amid price cuts in some major cities and concerns about tight credit for buyers.

Zhang Dawei, chief analyst with property agent Centaline, said that strong growth in first-tier cities and some second-tier cities has clouded what is an overall downward trend in the country's property market.