Weaker home prices add to China's economic fears
Index tracking 288 cities records first monthly drop in average housing costs since July 2012
Average home prices in 288 mainland cities tracked by consultancy E-House China posted their first month-on-month decline since July 2012, deepening worries of a sluggish housing market dragging down the world's second-largest economy.
This stoked speculation that the authorities would soon relax housing policies to stimulate demand.
The home price index released yesterday by CRIC, a unit of E-House China, edged down 0.02 per cent last month from March, with prices falling in 123 of the 288 cities on its watch list, but they were still up 6.9 per cent from a year earlier.
Home prices in 100 cities monitored by the index academy rose 0.1 per cent on the month, slower than March's 0.38 per cent gain.
Prices fell in 45 cities, against 37 in March.
The average tag of 11,013 yuan (HK$13,641) per square metre was 9.06 per cent higher than a year earlier, the first time the increase was slower than the double-digit pace since October last year.
"The market failed to improve in April [after a slack first quarter]," said the academy, with bank credit still tight and mortgage rates virtually on the rise.
More developers were cutting prices to boost sales, it added.
"However, homebuyers are expecting further discounts and have suspended purchases," it said.
Contraction in property construction slowed the mainland's economic growth to its slowest pace since 2012 in the first quarter and cities including Nanning, in Guangxi province, and Wuxi, in Jiangsu, have relaxed policies, although top leaders have so far remained tight-lipped on the matter.
Both surveys showed Shenzhen suffered month-on-month home price falls in April, but Beijing, Shanghai and Guangzhou still reported an upward trend.
The polarisation is even wider in smaller cities. Prices in Baoding, Hebei province, rose at the fastest clip of 3.35 per cent, while Jiangyin, in Jiangsu province, was the biggest underperformer with a fall of 3.19 per cent, data from the index academy showed.
