China's property price growth slows anew in August

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Indy Lifestyle Online

Growth in China's property prices slowed for the fourth straight month in August, data showed Friday, suggesting that government efforts to pop a feared speculative bubble are paying off.

Housing prices in 70 major cities rose 9.3 percent year-on-year in August, the National Bureau of Statistics said, down from 10.3 percent in July.

The slower growth came after Beijing imposed a range of measures to prevent the real-estate sector overheating and causing a bubble that analysts say could derail the economy.

Prices had surged 12.8 percent in April, the biggest on-year rise for a single month since July 2005, when the survey was widened to 70 cities from 35.

On a monthly basis, property prices were unchanged last month from July, the statistics bureau said.

Total floor space - commercial and residential - sold last month fell 10.1 percent year-on-year to 68.86 million square metres (741 million square feet), the data showed.

The value of sales also fell 8.6 percent from the same period last year to 353.3 billion yuan (52.2 billion dollars), adding to mounting evidence that the government's anti-speculation measures are working.

Authorities this year have tightened restrictions nationwide on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down-payments for second homes.

The government said in July it had no plans to ease the restrictions and would continue to "firmly crack down on speculative purchases of houses".

The State Council, or cabinet, said in May it would "progressively push forward the reform of the property tax", which is widely expected to entail an expansion of the tax on commercial real estate to cover residential houses.

Owing to fears of a US-style bubble, regulators have asked Chinese banks to test the possible impact of a 30-percent plunge in property prices on the quality of their loan books.