CHINESE home prices fell for a fifth straight month in September, wiping out gains scored in the past year and raising expectations the government will have to implement more economic support measures to cushion the blow.

    The monthly falls left average home prices in 70 major Chinese cities down 1.3 percent in September from a year earlier, the first such drop since November 2012.

    New-home prices fell month on month in a record 69 of the 70 major cities, up from 68 in August. Only the southern city of Xiamen saw stable prices last month, National Bureau of Statistics (NBS) data showed.

    The worst performance was in the eastern city of Hangzhou, where prices sagged 7.6 percent in September from a year before.

    The decelerating property market, which accounts for about 15 percent of China’s economy, has crimped demand in 40 sectors ranging from steel to cement and furniture.

    “The property downturn is still the main drag on the economy,” Wang Tao, an economist at UBS in Hong Kong, said in a note.

    “The negative impact of the ongoing property downturn is being felt not only in heavy industry, but also in manufacturing investment.”

    In late September, China cut mortgage rates and down payment levels for some homebuyers for the first time since the 2008/09 global financial crisis, its boldest step yet to energize an economy increasingly threatened by a sagging housing market.

    Although transaction data from private real estate consultancies pointed to a pick-up in sales in recent weeks, the impact of new government measures to provide cheaper loans to second-home buyers remains uncertain.

    “It still takes time to see whether a recovery of home sales will affect home prices,” Liu Jianwei, a senior statistician at the National Bureau of Statistics (NBS), said in a statement accompanying the data.

    Analysts concurred it was too early to tell if government moves in late September to lower mortgage rates and down payment requirements would be enough to stem the price slide.

    And even if prices do stabilize, developers will remain reluctant to start new projects until a glut of unsold homes is worked off, depressing demand for raw materials and keeping pressure on labor markets.

    “You can’t expect to feel the impact of policy measures right away. Liquidity is increasing and the real estate sector is driven by liquidity so prices will gradually improve,” said a Shenzhen-based developer.

    The number of potential buyers and sellers of properties increased significantly in October, but the negotiation process has also grown more demanding as sellers become more confident in the market outlook, a real estate agent in Shanghai said.

    Meanwhile, Chinese developers are turning to offbeat marketing gimmicks and give-aways as they battle to shift their massive inventory, including resort stays for buyers.(SD-Agencies)