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Monday, April 18, 2011

More Chinese cities see home prices slip

More Chinese cities saw the cost of new homes fall in March, official data showed on Monday, leading to suggestions that government moves to cool the real estate market could be having an impact.

The National Bureau of Statistics data, which came a day after authorities moved to further limit banks' lending, showed prices of new builds were lower in 12 of the 70 major cities tracked in March compared with February.

Eight cities had seen prices decline in February, while just three did so in January.Home prices were unchanged in eight cities in March, while 29 cities posted gains smaller than those seen in February.

Among major cities, Beijing prices were unchanged, while Shanghai saw a scant 0.2 percent rise, the statistics bureau said.

However, analysts said the data was unlikely to spell an end to government efforts to tamp down the market over the near term.

"The easing monthly property price data showed the administrative measures are having effect," said Chen Sheng, vice president of the China Index Academy, a property research institution.

"But authorities will not soften their stance, so as to prevent any possible price rebound.

"China has introduced a number of measures to cool the market since late 2009, including bans on buying second homes in some cities, while cities such as Shanghai and Chongqing have introduced trial property taxes.

On Sunday the central bank raised the amount of money banks must keep in reserve, effectively cutting their lending power, as it tries to rein in inflation, which last month hit its highest level since July 2008.

It has also raised interest rates four times since October.Premier Wen Jiabao told China's legislature last month the government would ramp up a campaign to build affordable housing in a bid to head off growing public concern over rising prices.

The March data marked the third monthly survey since the government scrapped a nationwide property index and switched to publishing the date for individual cities.

The old method, which gave an average of prices nationwide, had been criticised by some as understating price growth by diluting large spikes in big cities with tamer changes in smaller ones.


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