CHINA’S home prices slowed further last month as a raft of curbs cooled a furious price rally, but a supply shortage in parts of the nation and sizable inventories elsewhere underscored the challenges facing policymakers as they try to stabilize a polarized market.

    Analysts say government tightening measures in the past several months appeared to have dented speculative demand, a particularly welcome sign given underlying worries the overheated property market could crash and knock the economy hard.

    “The slowdown is within our expectations. It showed the concerted efforts from the Central Government to local government have been quite effective in curbing prices,” said Tang Li, a property analyst at investment bank NSBO.

    New-home prices rose 0.6 percent month on month in the nation’s 70 major cities, slowing from October’s 1.1 percent, according to Reuters calculations from data issued by the National Bureau of Statistics (NBS) yesterday.

    Despite the slowdown, however, market watchers are wary of a price rebound in the biggest cities due to a supply shortage that has fed persistently strong demand.

    “It’s likely there could be a rebound in first-tier cities and some second-tier cities in a few months,” Tang said.

    First-tier cities such as Shenzhen, Shanghai and Beijing prices rose 27.9 percent, 29.0 percent and 26.4 percent, respectively, from a year earlier, but their monthly pace slowed significantly as tightening measures implemented by local governments started to take effect.

    Home prices in Shenzhen fell for a second month to be off 0.3 percent from October, while Beijing and Shanghai prices were unchanged on a monthly basis, compared to a 0.5 percent rise for both cities last month.

    Compared with a year ago, new-home prices still rose 12.6 percent, up from a 12.3 percent increase in October, the National Bureau of Statistics said.

    China has depended on a surging real estate market and government stimulus to drive growth this year, but policymakers have become concerned that a property frenzy will fuel price bubbles and risk a market crash. (SD-Agencies)