China new house price declines slow in October: survey

BEIJING: Declines in China's new home prices slowed in October, a survey showed Friday, though figures still fell for a sixth straight month as property woes weigh on growth in the world's second-largest economy.

The average price of a new home in 100 major cities was 10,629 yuan ($1,738) per square metre in October, down 0.4 percent from September, the China Index Academy (CIA) said in a statement.

The decline was smaller than the 0.92 percent fall recorded in September. Still, prices have remained negative since May, as analysts say China's flagging property sector is contributing to growth slowdown in the broader economy.

China's economy expanded 7.3 percent in the third quarter, lower than the 7.5 percent expansion in the previous three months and the slowest since the depths of the 2008-2009 global financial crisis, the government announced earlier in October.

Among the country's 10 biggest cities, six experienced declines in October from the previous month, the report showed, with the central China city of Hangzhou falling the most at 2.58 percent to 16.166 yuan per square metre.

Prices in the capital Beijing, meanwhile, gained 0.69 percent to 32,504 yuan per square metre, CIA said, marking the biggest increase among the four top 10 cities that saw gains.

"As a whole, housing prices in main cities nationwide remain in a downward interval, but this month the extent of the drop decreased," CIA, the research unit of real estate website operator Soufun, said in the statement.

Year-on-year, prices in the 100 surveyed cities fell 0.52 percent in October from the same month last year, snapping 22 straight year-on-year increases, CIA said.

In recent years China has sought to rein in runaway property prices -- a source of discontent among ordinary citizens -- by introducing market control measures including buying limits on second and third homes.

But local governments make much of their income from land sales to developers so price declines negatively affect their revenues and have pushed them to loosen restrictions to cope.

In June the city of Hohhot in the northern region of Inner Mongolia became the first to drop restrictions on the purchase of second homes, and most other municipalities that had imposed the policy have followed suit.