BEIJING • Chinese home prices increased last month in the fewest cities in a year, signalling property curbs to deflate a potential housing bubble are taking effect.

New-home prices, excluding government-subsidised housing, gained last month in 45 of the 70 cities tracked by the authorities, down from 46 in December, the National Bureau of Statistics said yesterday. Prices fell in 20 cities and were unchanged in five.

The Chinese authorities have expanded curbs on home purchases and tightened restrictions on property lending in an attempt to avoid a housing bubble and reduce financial risks.

Some bank branches in Beijing, Guangzhou and Chongqing have raised mortgage rates for first-time buyers, people familiar with the matter said earlier this month.

New-home prices in Shenzhen, the nation's hottest market early last year, fell 0.5 per cent in January from December, the fourth straight monthly decline, the data showed.

Prices in Shanghai fell 0.1 per cent, a third monthly decline, and were unchanged in Beijing. Values continued to increase in the southern city of Guangzhou, gaining 0.6 per cent. A drop in land releases this year may keep pressure on prices in the capital.

Beijing plans to supply just 260ha of residential land, excluding government subsidised housing, this year, down from 850ha last year, Beijing News reported, citing a government document.

While the statistics bureau said home values "stabilised further" in mega and mid-size cities due to curbs, the government is likely to hold steadfast on cooling measures this year, said Bloomberg Intelligence senior analyst Patrick Wong.

Further tightening of mortgage lending could come after at least seven local city governments stepped up existing buying curbs since December, Mr Wong said.

Early private data showed residential transactions are recovering slightly in February in large cites. New-home sales in key cities tracked by China International Capital Corp rose to a three-month high last week.

China's central bank vowed to "strictly limit" the flow of credit into speculative housing purchases in its fourth-quarter monetary policy report last week. Apart from adopting prudent monetary policies, it encourages "city-specific" credit conditions to ensure "reasonable" growth in housing mortgages, the report said.

The wording is "a clear message" that China's central bank will roll out more policy tools targeting developers and households to prevent a potential property bubble, said Mr David Yang, a Shanghai-based analyst at UOB Kay Hian Investment, on Tuesday.

BLOOMBERG