Shenzhen overtook Shanghai as the most expensive city in China for new homes last month after a surge since April, but sales softened, pointing to a possible turn in the market's trajectory. New home prices in the city grew 7.84 per cent from June to 33,698 yuan per square metre. The gain was the strongest among the 10 major cities tracked by the SCMP-Creda index, a collaboration between the South China Morning Post and consultancy China Real Estate Data Academy. That helped Shenzhen regain the crown after losing it in March last year as it swiftly responded to an industry downturn. In between, Beijing sat at the top for two consecutive months and then Shanghai for 14. Prices also rose in all other nine cities, including Guangzhou, Wuhan, Nanjing, Tianjin, Chongqing and Hangzhou. The pace was the slowest in Chengdu at 0.01 per cent. "The market frenzy moderated in July," said Chen Sheng, the dean of the academy, as the impact from previous supportive policies waned and a slide in the stock market wiped trillions off family wealth, forcing some buyers of luxury homes to postpone their plans or cancel deals. Combined sales in the 10 cities fell 9.6 per cent from June after four consecutive months of increases. Beijing was the only first-tier city that saw a gain, up 26 per cent to 1.3 million sq metres. In Guangzhou, sales dropped 19 per cent month on month to 1.09 million sq metres, while Shanghai saw a 13 per cent decline to 1.3 million sq metres. Sales in Shenzhen also slipped for the first time since February, down 9 per cent to 813,100 sq metres. Four of the other six cities on the radar suffered a slide in transactions as well. Banks in Shenzhen, Guangzhou and Shanghai have started to tighten rules recently by raising down payments for mortgages. Across the country, new home sales rose 6.9 per cent in the January-July period from a year earlier, accelerating from an annual increase of 4.5 per cent in the first half, the National Bureau of Statistics said last week. But Chen said: "A strong market rebound in August is unlikely without much possibility of further policy support." In year-on-year terms, Nanjing, Chongqing, Hangzhou and Chengdu suffered a decline in new home prices last month. Prices surged the most in Shenzhen among the 10 cities in the index, by 17.81 per cent, followed by Wuhan with a rise of 10.62 per cent and Shanghai with a gain of 7.35 per cent. Home affordability deteriorated compared with June. An average home in Shenzhen cost more than 22 years of a local family's annual income in July's price level, up from less than 21 years a month earlier, according to the SCMP-Creda index.