THE growth in new home prices slowed in July for the first time in five months, with smaller cities especially weighed down by higher mortgage rates, price caps on resale homes and other steps to cool speculation, a private survey showed yesterday.

New home prices in 100 cities rose 0.35 percent in July from a month earlier, versus 0.36 percent growth in June, according to data from China Index Academy, one of the country’s largest independent real estate research firms.

This year the authorities have implemented measures to rein in the real estate market, including caps on developers’ borrowing and strict bans on illegal flows of funds into the sector.

“New home growth softened in July against the backdrop of stringent measures and tighter credit,” said the group’s director, Cao Jingjing.

Growth in home sales is expected to remain mild as the curbs are unlikely to be eased, the survey said.

Last week, China’s housing ministry urged five cities including the eastern city of Jinhua and the southeastern city of Quanzhou to stabilize their property markets, while the central bank ordered lenders in Shanghai to raise interest rates on mortgage loans.

Prices in China’s smaller tier-three and tier-four cities rose 0.21 percent month on month, versus 0.29 percent in June. Tier-two cities, which include some provincial capitals, gained 0.29 percent, slowing from June’s 0.31 percent rise.

Price growth in China’s biggest cities such as Shanghai and Beijing, however, continued to accelerate, up 0.54 percent versus June’s 0.48 percent growth, suggesting persistent demand for properties in the country’s economically most vibrant cities.

But new home prices in Shenzhen declined 0.26 percent, the first drop since February. Local media had warned in May that Shenzhen could be a testing ground for China’s plans to impose a nationwide property tax.

On an annual basis, China’s new home prices grew 3.81 percent in July, slowing from June’s 3.89 percent gain.(SD-Agencies)