China's property prices slow in June

BEIJING: Property prices in China rose at a slower pace in June from a month ago, government data showed Monday, in a further sign that Beijing's efforts to cool the sizzling real estate market were kicking in.

Housing prices in 70 major cities rose 11.4 per cent year-on-year in June, the National Bureau of Statistics said on its website, down from the 12.4 per cent rise seen in the previous month.

The figure hit 12.8 per cent in April, the biggest on-year rise for a single month since July 2005, when the survey was widened to 70 cities from 35.

The prices in June fell by 0.1 per cent from May, official data showed, the first month-on-month decline since March last year, according to experts.

"This is a turning point of the overall property price trend," Yang Hongxu, a Shanghai-based analyst with E-House China R&D Institute, said.

"The decline will continue for several months once the trend is consolidated -- probably lasting into the end of this year or the beginning of next year," he said.

Chinese authorities have issued a slew of measures in recent months as they seek to prevent the property market overheating and causing a bubble that could derail the world's third-largest economy.

The authorities have so far 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.

Alan Chiang, residential market head at property consultancy DTZ China, said the government could refrain from introducing more tightening measures in the short term pending market sentiment in the second half of the year.

Chinese media reports have said a property tax could be imposed on a trial basis in Beijing, Shanghai, the southwestern mega-city of Chongqing and the southern city of Shenzhen.

Qin Hong, a senior researcher at the housing ministry, said China would impose the tax "at an appropriate time" as a "long-term measure" to regulate the sector, the official Securities Times reported Monday.

China currently has no such levy on residential property but does impose a 1.2 per cent tax on 70-90 per cent of the value of commercial real estate.