Almost 80 per cent of the 70 major cities monitored by China’s National Bureau of Statistics (NBS) suffered a month-on-month decline in new home prices last month.
Analysts said developers needed to cut prices even more deeply, as the worst had yet to come for the industry.
The NBS announced on Friday that new home prices fell in 55 cities, up from 35 in May and eight in April. The market was last in a downturn in 2012.
Hangzhou, the capital of Zhejiang province, suffered the deepest price drop of 1.8 per cent, accelerating from a fall of 1.4 per cent in May and 0.7 per cent in April.
“The worst of China’s property downturn is not yet behind us,” UBS chief China economist Wang Tao said in a note on Wednesday, after the country reported the worst first-half performance ever in property sales despite better-than-expected economic growth of 7.5 per cent in the second quarter.
“Developers may speed up construction in the coming autumn sales season to accelerate sales and digest inventory, but downward pressure on prices and new housing starts will likely grow,” she said.
New home prices were still on the rise in Beijing, up 0.1 per cent from May. But they fell 0.7 per cent in Shanghai, 0.4 per cent in Shenzhen and 0.6 per cent in Guangzhou, according to the NBS.
In year-on-year terms, new home prices rose in all the cities but one – Wenzhou in Zhejiang province. Xiamen in Fujian province had the quickest increase of 9.4 per cent.
More than a dozen mainland cities have relaxed home purchase restrictions and residency registration rules to stimulate property sales.
However, tight property loan policies at banks, despite the central bank’s call for easing, have crimped buying demand.