Year on year the prices in the 70 cities that make up the government figures are slowing, a sign that tightening measures are having an effect.
The National Bureau of Statistics said that prices of newly built homes in 24 of the 70 large and medium sized Chinese cities it surveys increased last month, up from 23 cities in August.
The survey also showed that prices of newly built homes in 17 of the 70 cities fell on month in September, higher than the 16 cities in August.
Prices of newly built homes in major cities such as Beijing, Shanghai, Shenzhen and Guangzhou were flat compared with August, the figures show.
Independently compiled data by Soufun Holdings, a real estate website operator, showed average prices for new homes nationwide dropped for the first time in a year. Average prices of new homes in 100 cities tracked by Soufun fell 0.03% in September from a month earlier.
‘The trend of prices falling will become more obvious in the fourth quarter,’ Soufun said in a report, adding that the chance of Beijing easing its curbs on the property market is ‘very slim’.
Since early last year, China has implemented property tightening measures such as limits on home purchases and credit curbs to keep property prices in check and head off criticism that the cost of housing is climbing out of reach for many of the country's 1.3 billion people.
A number of banks are increasing their interest rates on mortgages for first homes. The China Construction Bank Corporation, the nation’s second biggest by market value, increased rates in Beijing to 1.05 times the central bank’s benchmark lending rate. China Everbright has raised its first home mortgage rate in Shanghai to the same level.
But Industrial and Commercial Bank of China, the nation’s biggest, Bank of China, and the Bank of Communications, have so far refrained from raising rates on first home loans.
Tighter lending for first homes could freeze the market, slowing the economy, according to Alan Jin, a property analyst at Mizuho Asia Securities in Hong Kong. New loans in September were the lowest in almost two years after the central bank raised borrowing costs five times in 12 months and boosted reserve requirements to rein in inflation and deflate an asset bubble.
‘It’s normal for banks to increase rates because mortgage rates are low if compared with other loans such as for small and medium sized companies and other banks will probably follow suit,’ said Sun Peng, a Beijing based analyst at Bank of China.
