BEIJING: Growth in Chinese residential land prices slowed for the first time in nearly two years in the second quarter of this year, the land ministry said on Wednesday, another indication that the property market is losing steam.
Compared with a year before, the average price of land used for residential homes in 105 major cities rose 9.1 percent in the second quarter to 5,214 yuan ($840) per square metre, according to a report from the China Land Surveying and Planning Institute, a research unit under the land ministry.
That compares with a 9.5 percent rise in the first quarter of 2014. It is the first time that growth in land prices has slowed since the third quarter of 2012.
The data followed figures last month that showed China's average home prices fell for the first time in two years in May, adding to signs of a cooling in the property market that has become a persistent drag on the broader economy.
Compared to the previous three months, land prices for residential homes rose 1.5 percent in the second quarter, but that is the second consecutive quarter that growth has slowed, the report said.
Residential land price rose in annual terms in 95 of the 105 cities tracked, down slightly from 96 cities in the first quarter. Only eight cities saw land prices fall in the second quarter from a year before.
"The cooling-off in the housing market in some regions is spreading to the land market," the institute said in the report on its website.
Other official figures on Wednesday showed Chinese home sales surged in June from May as state-controlled banks offered more credit to buyers to avert a sharp slowdown in the sector.
Some analysts have said that large inventories of unsold homes and recent sluggish sales were likely to trigger deeper price cuts in coming months as developers try to protect their cash flow. Developers with smaller or weaker balance sheets may have problems paying off debt if the downturn is prolonged.
Yet other experts believe China's housing market is unlikely to suffer a sharp correction due to government support, high down payment levels and low household debt, which will limit the fallout for the broader economy.
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