NEW home prices in China maintained steady growth in October, but soft patches emerged in the country’s larger cities where momentum slowed, suggesting local authorities could relax some anti-speculative measures to prop up faltering demand.

Average new home prices in China’s 70 major cities rose 0.5 percent in October from the previous month, in line with September’s growth and marking the 54th straight month of gains, showed media calculation based on National Bureau of Statistics (NBS) data Friday.

Most of the 70 cities surveyed by the NBS still reported monthly price increases for new homes, though the number was down to 50 from 53 in September, the lowest level seen since February 2018, when it was 44.

Annual growth also pointed to softness in the sector with home prices rising 7.8 percent in October, slowing from 8.4 percent in September and the weakest pace since August last year.

“We expect property market conditions to worsen, especially in low-tier cities,” Nomura analysts wrote in a note. “We also believe the government may need to reverse its tightening measures on the property sector no later than spring 2020 to stabilize growth.”

The modest rise in prices nationally masked mixed trends across the country with some cities showing signs of rapid cooling while others are still plagued with overheating risks.

Price growth in China’s mega-cities – Beijing, Shanghai, Shenzhen and Guangzhou – rose 0.1 percent from a month earlier, slowing from a 0.4 percent gain in September, the statistics bureau said in a statement accompanying the data. Beijing saw new home prices fall 0.2 percent month on month.

In contrast, prices in tier-2 rose 0.5 percent and tier-3 cities rose 0.6 percent, slowing 0.1 and 0.2 percentage points, respectively. Xining, a city of 2 million in Central China, was the top price performer in the month, rising a robust 2.8 percent on a monthly basis.

Data released Thursday showed China’s property investment and sales growth both eased to a three-month low in October.(SD-Agencies)