Home prices drop in more Chinese cities

Year on year, prices of new homes increased in 69 cities last month, even though 67 of them saw the rates of growth moderating, said Liu Jianwei, a senior statistician at the NBS.

In 61 cities, the growth rates also decelerated in the prices of existing homes in April, Liu said.

Zhang Dawei, chief analyst at real estate agent Centaline Property, said China's property sector is showing a clear trend of cyclical adjustment as house prices declined in more cities across the country.

Zhang attributed the current property downturn to two reasons -- reduced mortgage availability to home buyers and a tightening in loans for developers, and the end of national house under-supply with some third- and fourth-tier cities hit by over-supply.

Market expectation has changed and more potential buyers have chosen to take a wait-and-see attitude, forcing property developers to lower prices to increase sales, Zhang said.

A string of signs have pointed to a property downturn in China. Last Tuesday, the real estate development climate index, also compiled by the NBS, dropped 0.61 points from March to 95.79 points in April. It has declined month on month for three consecutive months.

The cooling of the property sector was backed up by new inventory data released on Monday by E-house China R&D Institute, a housing research center headquartered in Shanghai.

By the end of last month, combined new residential housing inventories in 35 cities tracked by the institute stood at 248.91 million square meters, the highest level in five years.

Chang Jian, chief China economist at Barclays, said weak sales and cash flow pressures amid a tightening in loan and trust financing have prompted some developers to cut prices, which, in turn, caused home buyers to adopt a wait-and-see attitude at the start of 2014.

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