China new home prices fall across 54 cities in May

New-home prices in China declined in May from a year earlier across 54 cities, as against declines in 43 cities in April, according to statistics bureau data released today.

The figures suggest a widening slowdown underway as Beijing cut interest rates and eased controls on lending in June.

Beijing and Shanghai were among the cities that showed declining trends across the 70 cities officially tracked, with prices dropping an average of 1.2 per cent and 1.6 per cent, respectively, in May year-on-year.

Other cities that had once recorded steep prices also showed a deepening slump, with Guangzhou seeing prices retreating 1.6 per cent and Shenzhen down 2.4 per cent.

National-average prices fell 1.5 per cent from a year earlier, as against a 1.2 per cent slump in April, according to a Reuters report.

However, some analysts said the data offered glimpses of a market beginning to stabilise as home prices in Shanghai rose 0.3 per cent on a month-on-month basis, while prices in Beijing fell 0.1 per cent in the same period.

According to the statistics bureau, average prices in May were down across 43 cities and remained unchanged in 21, month-on-month.

According to strategist Piper Jaffray at Andrew Sullivan, Beijing appeared to be trying to boost sales of affordable-housing units even as it kept the pressure up on speculators.

He said he expected a further consolidation over the next six months, after which the outlook would improve. But it was still very location-specific, he said.