China May home prices drop in fewer cities as some confidence returns

SHANGHAI (BLOOMBERG) - China's home prices fell in fewer cities for a third month as buyers' confidence returned after the removal of property curbs and lower interest rates.

New-home prices fell in 41 of the 70 cities tracked by the government from a month earlier, the National Bureau of Statistics said Thursday, compared with declines in 47 in April. Prices rose in 20 cities and were unchanged in nine.

China eased mortgage policies and down-payment requirements for some homebuyers at the end of March, adding to easing measures since September to aid an industry that has been weighing on economic growth. Home sales rose for the first time this year in April and extended gains in May.

The average new-home prices in 100 cities tracked by SouFun Holdings Ltd. reversed a yearlong downward course and rose 0.45 per cent in May from the previous month as developers tapped a favorable policy environment to trim inventories, according to China's biggest property website owner.