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The growth in property prices in 70 major mainland cities slowed last month, reflecting the impact of the central government's measures to cool the real estate sector.

According to data from the National Bureau of Statistics, most cities recorded a slowdown in property price growth in February.

The average price of new private housing in Beijing rose 0.5 per cent month on month, compared with a 1 per cent increase in January. It was 8.4 per cent higher year on year.

The price of new homes in Guangzhou climbed 0.6 per cent month on month, down from a 1.7 per cent growth rate in January.

Average prices in Shenzhen grew  1 per cent on the month, which was higher than Beijing and Guangzhou, but down from the 2 per cent rise recorded in January. 

In Shanghai, average prices climbed 1.1 per cent, unchanged from January. 

The bureau said eight cities recorded a fall in new home property prices last month, in contrast to January, when only three cities recorded a decline.

Three cities recorded property price growth of more than 2 per cent in January, but no cities reached this level last month.

Fuzhou, a third-tier city in Fujian province, recorded the strongest growth last month, with new home prices rising 1.5 per cent.

In the secondary market, price growth also appears to be slowing.

In Shanghai, the average price of second-hand homes climbed 0.4 per cent last month, compared with a 0.5 per cent gain in January.

Guangzhou's property prices grew 0.6 per cent during the same period, less than the 1.2 per cent increase in January.

And while five cities recorded at least 2 per cent price growth in January, only five cities recorded at least a 1 per cent increase last month.

'The slowdown in property prices is due to a fall in sales,' said David Ng, the head of regional property research at the Royal Bank of Scotland. 'Property prices are still higher than the levels in December last year.'

Ng said he believed property prices would be flat this year.

'I don't think prices will drop this year. The government has imposed restrictions on buying second homes. Even if developers cut the asking prices of their projects, it won't boost the property sales,' he said.

Figures from property consultant DTZ also show that the average price in Shanghai dropped 10 per cent month on month in February, but it said this reflected changes in the top end of the market only.

'Transactions in the luxury property segment dropped sharply last month. Potential buyers of luxury properties all owned more than two flats. The new restrictions on buying second homes have kept them away from the market,' said Alan Chiang Sheung-lai, the head of residential property at DTZ on the mainland.

If compared with the same products, Chiang said only properties in the suburban areas of first-tier cities recorded a fall in property prices. 

Prices for other properties were stable.



Moves to cool property market take edge off prices in 70 mainland cities