Update | Tightening measures take effect as China’s home price gains cool in October

China’s average new home price growth rate slowed significantly in October after 22 cities rolled out a raft of cooling measures, according to a private index released on Friday.

Growth in average new home prices in 100 cities monitored by China Index Academy slowed to 1.65 per cent month on month in October, compared with the 2.83 per cent gain in September.

Cities that previously saw a frenetic surge in home prices experienced a larger fall in their growth rate. Zhengzhou, in central Henan province, saw the steepest fall from 6.92 per cent growth in September to 1.55 per cent in October. Wuxi in Jiangsu province saw its price gain growth rate fall from 6.82 per cent to 1.94 per cent.

Of the 16 cities that had imposed tightening policies and were monitored by the academy, 14 saw a cooling in price gains. Price advances in Beijing fell to 1.26 per cent from 3.88 per cent, while in Shanghai they cooled to 1.09 per cent from 3.54 per cent.

Prices of pre-existing homes, which are more sensitive to market change, also saw major corrections. Price gains in Beijing slowed by 1.79 percentage points to 0.97 per cent, while in Shanghai they slowed to 0.59 per cent.

The number of housing transactions also fell with the cooling price growth. Of the 22 cities that introduced curbs, 13 saw a month-on-month fall in the number of sales in October, according to Centaline Property Group. Combined sales in 54 cities tracked by the agency in the first week of November fell by a further 20 per cent.