China's home prices fell for the second consecutive month in October from a year earlier, official data showed on Tuesday, pointing to a persistent property downturn - despite government efforts to lift the market. The price drop was the biggest since Reuters started calculating nation-wide housing prices in 2011, when the National Bureau of Statistics stopped issuing nation-wide price data.
The deceleration in the property market, which accounts for about 15 percent of China's economy, intensified concerns that a softening housing sector would hold back growth. "In the near term, we'll probably still see the adjustment continue. House prices will continue to decline and real estate investment will continue to slow down," Haibin Zhu, chief economist at J.P. Morgan in Hong Kong, said.
Tuesday's price news follows official figures last week showing that property sales fell 1.6 percent in October in terms of floor space, from September's 10.3 percent drop. Property investment, which affects more than 40 other sectors from cement to furniture, grew 12.4 percent between January to October from a year ago, its slowest pace in more than five years.
Average home prices in 70 major Chinese cities fell 2.6 percent last month, double the fall expected by financial markets, after dropping 1.3 percent in September. Compared with the previous month, home prices were down 0.8 percent in October, a sixth consecutive monthly drop following September's drop of 1.0 percent, according to Reuters calculations from data published on Tuesday by the National Bureau of Statistics(NBS).
New home prices fell month-on-month in 69 of the 70 major cities the NBS monitors, unchanged from September. To stop property prices from sliding further, the government cut mortgage rates and downpayment levels in late September for some home buyers, taking one of its biggest steps this year to boost an economy increasingly threatened by a sagging housing market.
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