More Chinese cities see house price falls

BEIJING: More Chinese cities saw the prices of new homes fall in July compared with the previous month, official data showed Thursday, as Beijing stepped up efforts to cool the booming property market.

The cost of new apartments in 14 out of 70 Chinese cities tracked by the government declined last month, compared with 12 cities in June, the National Bureau of Statistics (NBS) said in a statement.

Soaring property prices are a major source of official and consumer concern in China, with apartment costs rising out of the reach of many people and threatening to spark social unrest in the country of more than 1.3 billion.

China has introduced a range of measures aimed at reducing prices since late 2009, such as bans on buying second homes in some cities, hiking minimum downpayments and trialling property taxes in Shanghai and Chongqing.

But officials are treading carefully as the real estate sector is a major driver of economic growth and land sales to developers are an important source of revenue for cash-strapped local governments.

The NBS said new home prices increased in 39 cities month-on-month -- down from 44 in June -- and were unchanged in 17 others.

The cost of new homes in 68 of the cities surveyed rose year-on-year in July -- up from 67 recorded in each month from April to June.

The government last month pledged to extend limits on new home purchases to smaller cities, adding it would tighten existing property restrictions in areas that have seen excessive price rises to push them "back to reasonable levels".

Home purchase limits for second- and third-tier cities are expected to be announced by the end of this month, Wednesday's official Shanghai Securities News said.

To tame soaring prices -- and other consumer costs -- the central bank has also raised interest rates five times since October and increased the amount of money banks must keep in reserve numerous times.

Copyright AFP (Agence France-Presse), 2011