China home price growth cools in February as large cities tighten rules

More cities reported monthly gains, with the number up to 66 from 64 in January. PHOTO: EPA-EFE

BEIJING (REUTERS) - Growth in new home prices in China eased slightly in February as demand slowed over the Chinese New Year and some major cities clamped down further on speculative buying, a private survey showed on Monday (March 1).

New home prices in 100 cities rose 0.2 per cent in February from a month earlier, slowing from 0.37 per cent in January, according to data from China Index Academy (CIA), one of the country's largest independent real estate research firms.

A series of property market curbs rolled out by bigger cities last month and the week-long new year holidays have led to softer home price growth, said CIA research director Cao Jingjing.

Since late January, major cities including Shanghai, Shenzhen and Beijing have unveiled tighter regulations to close loopholes in home transactions and contain illegal flows of funds into the sector, responding to recent signs of heating up in local markets fuelled mainly by hefty credit issuance.

"We expect home prices growth to maintain a steady and upward trend in March as developers speed up housing supply after holidays," said the director, who also estimates there will be more tightening in cities where demand remains hot.

On an annual basis, new home prices rose 4.01 per cent, slightly outpacing January's 3.56 per cent gain.

More cities reported monthly gains, with the number up to 66 from 64 in January, while 27 cities posted lower home prices compared with 34 in the preceding month.

Home transactions in 16 major cities tracked by CIA fell 38.4 per cent in February from the previous month, with tier-3 cities suffering the biggest drop.

Land sales by volume in 40 major cities fell 37 per cent in February from January, and declined 22 per cent on an annual basis, CIA data showed.

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