BEIJING/HONG KONG • China's new home prices rose in August at the slowest pace in seven months and fell or levelled off in more cities as cooling measures dampened speculation, though there were no signs of a sharper correction that could damage the economy.

Average new home prices in China's 70 major cities rose 0.2 per cent last month, half the pace of July, National Bureau of Statistics (NBS) data showed yesterday.

It is the first time in three years that prices in the 15 hottest markets singled out by the NBS - mostly mega cities and provincial capitals - have all stopped rising on a monthly basis after nearly six months of intensified controls, analysts noted.

"The turning point for Tier-1 and Tier-2 cities has emerged," Beijing-based senior analyst Zhang Dawei at property agency Centaline wrote in a note. The Hong Kong-listed shares of Chinese property developers jumped after the news.

Investment strategy director Conita Hung of Gransing Securities said: "The data made investors a little more comfortable. The market was worried that China might step up tightening if home prices continued to rise… The policies in place are effective and there is less worry over further tightening."

Over the last year, more than 45 major cities have imposed restrictive policies of varying severity to curb fast-rising prices, with some forced into several rounds of tightening measures. Shenzhen, which borders Hong Kong, saw prices fall 1.9 per cent from a year earlier, the first annual fall since March 2015, while its monthly decline further deepened to 0.4 per cent from July's 0.2 per cent.

Prices in Shanghai and Beijing rose 2.8 per cent and 5.2 per cent respectively from a year earlier, but were unchanged on a monthly basis. However, the latest data showed that speculators are continuing to move into smaller cities with fewer controls.

REUTERS