China's home prices remain stable as control policies resume

China's property market remained stable in October with home prices falling or posting slower growth in major cities amid tough control policies, the National Bureau of Statistics (NBS) said Saturday.

On a yearly basis, new residential housing prices saw slower growth in 13 of the 15 major cities considered the "hottest markets," NBS data showed.

On a month-on-month basis, new residential housing prices fell in 9 of the 15 cities.

New home prices in Tianjin, Shanghai, and Chengdu climbed 0.1, 0.3, and 0.7 percent, respectively.

Of the 70 large and medium-sized cities surveyed, home prices in 50 cities rose month on month, compared with 44 in September.

NBS statistician Liu Jianwei said that housing prices were "generally stable" in major cities as control policies in different cities continued to take effect.

New residential housing prices in the country's first-tier cities dropped 0.1 percent compared with a month earlier, while second-hand home prices remained flat.

On a yearly basis, both new and second-hand home prices in the first-tier cities reported slower growth for the 13th consecutive month in October.

New home prices in smaller second- and third-tier cities both rose 0.3 percent month on month, higher than the growth in September.

The data provides fresh evidence that China's property market boom is running out of steam as the government continues cooling measures to squeeze asset bubbles.

Since late last year, dozens of local governments have passed or expanded restrictions on house purchases and increased the minimum down payment required for a mortgage.

The property market was also cooled by relatively tightened liquidity conditions as the government moved to contain leverage and risk in the financial system.

Data from the People's Bank of China showed that loans to China's real estate sector continued to grow at a slower pace, with outstanding loans up 22.8 percent year on year to 31.1 trillion yuan (4.7 trillion U.S. dollars) by the end of September, 1.4 percentage points lower than the rate seen at the end of June.

Despite the cooling measures, China's economy expanded by a robust 6.9 percent year on year in the first three quarters, well above the government target of 6.5 percent for the year.

Recent policies have showed the government will not loosen its stance in curbing property speculation, and that will limit the upward potential for housing prices, said Bank of Communications in a research note.

Authorities stepped up measures to act against irregularities in property financing earlier this month, prohibiting property developers, real estate agencies as well as Internet finance and micro-loan companies from offering illicit down payment financing for buyers.

Using funds obtained through channels such as consumer loans for property purchases will also be banned, according to the Ministry of Housing and Urban-Rural Development.

Earlier NBS data showed that property sales in terms of floor area climbed 8.2 percent in the first 10 months, retreating 2.1 percentage points from the January-September level.

By the end of October, 602.58 million square meters of property remained unsold, down by 8.82 million square meters from a month earlier.

Taking into account the tightened liquidity condition and the fact that more cities imposed housing purchase restrictions in October, sales will further trend down at year end, Bank of Communications predicted.