The latest figures on the mainland's property sector suggest that government austerity measures are having an increasing impact, with only two out of 70 cities recording price gains for newly built homes in December, the weakest performance of any month last year.
Figures released by the National Bureau of Statistics showed that prices fell month on month in 52 of the 70 cities reviewed, up from 49 in November.
Sixteen cities recorded no change in home prices last month, according to the bureau. Only two, Guiyang and Yinchuan, posted a slight month-on-month increase of 0.1 per cent each, compared with five cities in November.
'We expected these falls in flat prices on the mainland,' said Nicole Wong Yim, regional head of property research at the CLSA investment brokerage.
'There was a bigger supply in the second half of last year, especially after the credit tightening around August and September when people found it more difficult to get mortgage loans,' she said. 'As more developers started slashing prices, the downtrend in home prices has deepened and spread to more mainland cities.'
However, she said home loans on the mainland had been improving slightly from no growth in October to a positive gain in December. But it would take some time for banks to release money to the market and for the public to regain confidence.