China's home prices in June fell from previous month, with new home prices in 288 cities down 0.1% from May, marking third straight month-over-month drop; home prices up 5.3% year-over-year, easing from rise of 5.8% in May, survey shows

Allison Oesterle

BEIJING , July 1, 2014 (Thomson Reuters Corp.) – China's home prices eased further in June, two private surveys showed on Tuesday, adding to signs of a cooling housing market which is posing a growing risk to the broader economy.

Prices of new homes in 288 cities fell 0.06 percent in June from May, the third month-on-month drop in a row, a poll by real estate services firm E-House China Holdings Ltd showed.

Compared to the same period a year ago, home prices rose 5.3 percent in June, easing from a rise of 5.8 percent in May and marking the eighth consecutive month of slowing annual property inflation.

A separate survey by China Real Estate Index System(CREIS) showed average prices in the 100 biggest cities fell 0.5 percent in June from May, the second consecutive monthly drop.

Meanwhile, home prices still rose 6.5 percent in June from a year ago, moderating from a 7.8 percent gain in May, CREIS said.

"After nearly two years of continuously rising, China's home prices have entered a period of adjustment," said CREIS, a consultancy linked to China's largest online property information firm, Soufun Holdings.

After a strong performance in 2013, China's real estate market has softened. Sales have slowed, new construction has dropped off sharply and banks have become increasingly cautious about lending to developers and home-buyers.

Accounting for about 15 percent of China's economy, the real estate sector is the country's biggest wild card this year in terms of growth, some analysts said.

Concerned about a sharp downturn in the property sector, the central bank recently ordered commercial banks to quicken mortgage lending and some local governments also started to act to lift home purchase restrictions.

Official figures showed home prices fell for the first time in two years in May. The statistical bureau is due to publish official home price data for 70 major cities for June on July 18.

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