China's home price rises ease for first time in 14 months

Mon Feb 24, 2014 6:53am EST
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BEIJING (Reuters) - China's home price rises eased for the first time in 14 months in January, the latest sign that the government's more than four-year campaign to rein in property risk may finally be starting to bite.

Average new home prices in China's 70 major cities rose 9.6 percent in January from a year earlier, easing from the previous month's 9.9 percent rise, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS) on Monday.

It was the first slowdown in the rate of price increases since November 2012.

House prices in China have surged in the past year but the market began to show signs of losing momentum at the end of 2013 as local governments took further tightening measures at the prompting of a central government worried about the risk of an asset bubble.

"Because of the effects of a series of government measures including tightening curbs in some cities and an increasing supply of affordable housing, the market environment and pricing expectations were relatively stable," said Liu Jianwei, a senior statistician at the NBS.

"Tightening credit conditions and easing pressures from housing inventories also helped home sales to drop, which in turn eased the home price rises further in some cities," Liu said in a statement accompanying the data.

Prices in the capital Beijing rose 14.7 percent in January from a year earlier, easing from December's year-on-year increase of 16 percent, and the third month of slowing gains after a record jump in October.

Shanghai price gains eased to 17.5 percent in January from a year ago, versus 18.2 percent annual growth in December.

Home sales were also likely to have cooled in most major cities in January due to the Lunar New Year holiday, when business activity slows markedly.   Continued...

A farmer walks past a vegetable field near newly-built residential buildings in Jiaxing, Zhejiang province February 23, 2014. REUTERS/William Hong