CHINA’S home price gains tapered off last month, as second-tier cities joined some of the nation’s largest hubs in imposing housing curbs to cool surging prices.

    New-home prices excluding government-subsidized housing climbed in 55 cities in June, down from 60 in May, among the 70 tracked, the National Bureau of Statistics said yesterday. Prices dropped in 10 cities, compared with four a month earlier. They were unchanged in five cities in June.

    First-tier cities maintained recent rapid price rises, with Shenzhen and Shanghai rising 2.0 percent and 2.6, respectively, on a monthly basis, faster than in May.

    Some of the biggest cities showed eye-popping gains on a yearly basis, with prices in Shenzhen up 46.7 percent and Shanghai up 27.7 percent. That could raise the risk of further property cooling measures in some areas.

    A surge in home prices showed signs of slowing after more regional hubs followed top cities Shanghai and Shenzhen to impose curbs designed to stem a surge in property prices. Local authorities raised mortgage down payment requirements for some homes in Xiamen, a southern port city in Fujian Province, and Hefei, the provincial capital of Anhui, where housing prices led gains in May.

    Home sales moderated for a second straight month in June, with a slower increase in property development investment, raising questions on the sustainability of the liquidity-fueled rally. The value of homes sold rose 22 percent to 1 trillion yuan (US$150 billion) last month from a year earlier, according to Bloomberg calculations based on data the National Bureau of Statistics released Friday. The increase compares with a 32.9 percent surge the previous month and is down from a year-on-year gain of 71 percent recorded in March.

    Property transactions “peaked” in the second quarter, as pent-up demand released under intensive stimulus last year ran its course, said Harrison Hu, chief economist for Greater China at Royal Bank of Scotland Group Plc. in Singapore.

    Prices in June gained in 73 cities among the 100 tracked by SouFun Holdings Ltd., the owner of China’s biggest property website, compared with increases in 74 the previous month. Average new-home prices rose 1.3 percent, sliding from the 1.7 percent seen the previous month.

    The property market is a key driver of China’s economy and a robust recovery in home prices and sales gave a stronger-than-expected boost to activity in the first half of the year.

    A rally in the housing market has supported China’s overall economic growth this year, even as it shows some signs of flagging. Economic output by real estate brokers surged 8.8 percent from a year earlier in the April-to-June period, while construction activities jumped 7.3 percent, data from the National Bureau of Statistics showed Saturday.

    But the slowing price growth in smaller cities and cooling property investment show the economic bounce may already be fading, raising the risk of weaker growth in coming months.

    (SD-Agencies)