BEIJING, Oct. 18 (Xinhua) -- More cities reported a slowdown in year-on-year increases in property prices in September as a result of government's tightening efforts to cool the market, the National Bureau of Statistics (NBS) said Tuesday.
"The rapid growth in property prices has been markedly contained, as prices in some cities begin to retreat," NBS spokesman Sheng Laiyun said in a press conference.
In September, 59 cities out of the statistical pool of 70 major cities saw new home prices increase more slowly from a year earlier, compared with 40 cities in August, the NBS said in a report on its website.
For month-on-month changes, 17 cities saw declines in new home prices in September, up from 16 in August. Meanwhile, prices in 29 cities remained unchanged, the report said.
Property prices in first-tier cities, including Beijing, Shanghai, Shenzhen and Guangzhou, which are viewed as a barometer for the property market, all stayed flat month-on-month for the third straight month, according to the report.
As for resold housing units, 46 cities reported that second-hand home prices declined or stayed unchanged month-on-month in September, up from 43 in August.
"Judging from these indices, government's control efforts have achieved positive results and the property market is heading toward the macro control direction," Sheng said.
Sheng noted that positive changes have happened in the property market as investment in the sector has cooled to some extent and investment demands, especially the speculative demand, have been curbed.
Zhang Dawei, an analyst with Centraline Property, a Beijing-based real estate agency, said a turning point for the property prices is indicated by the data, especially the data regarding first-tier cities, and property prices are gradually heading downwards amid cumulative government control efforts.
The government adopted a series of tightening measures earlier this year, including asking local governments to set new home price control targets, raising minimum down payments for second-home purchases, limiting purchases of new homes and introducing property taxes in the cities of Shanghai and Chongqing, in order to keep housing prices down.
Zhang Yue, an analyst with the Beijing-based Homelink Property, forecast that property transactions in the fourth quarter may drop further.
"Government control measures will yield far better results in first-tier cities than in second and third-tier cities. Meanwhile, tightening property loans by banks in second and third-tier cities will spread to big cities, which will further reduce buying demands," Zhang Yue said.
According to Zhang Yue, property transaction volumes in Beijing, Shanghai and Shenzhen tumbled 60.3 percent, 60.5 percent and 62.9 percent, respectively, in September, a traditional boom season for property sales.
The business climate index for the real estate sector also fell for the four consecutive month to 100.41 in September, indicating that property developers are less confident in the future market, Zhang Yue said.
A reading above 100 shows economic expansion, while a reading below 100 indicates contraction.
Meanwhile, cash-strapped property developers are facing increasing financing difficulties and piling inventories pressures, Zhang Yue said.
NBS data showed that property developers raised 6.19 trillion yuan of funds in the first nine months, up 22.7 percent from last year. But the rise was 0.7 percentage points lower than that in the first eight months.
Centraline Property data showed that as of the beginning of October, property inventories increased over 30 percent year-on-year to 60.44 million square meters in 10 cities where purchase limits are most rigidly enforced.
"But the turning point indicated doesn't mean the same thing for the market, and property price data of the first and second-tier cities can hardly reflect the market as a whole. The current government control should be continued," Zhang Dawei said.
The central government started in July to prepare home purchase restrictions in the country's second and third-tier cities to prevent further price increases. But only a few of them have adopted the policy.
As one market-cooling measure, the government has restricted residents in 43 major cities from buying second or third homes, resulting in a decline in property transaction volume in many of these cities.
Local governments are counting on the property market as land sales and investment in the property sector are the major drivers for local economic growth. Despite the central government's resolution, local authorities are still reluctant to implement the policy, Zhang Dawei said.
"It is a critical time for government control of the property sector," Zhang Dawei said, expecting the market turning point to occur in the first quarter of next year if the government sticks to its tightening measures.
"We will not relinquish control as the property sector serves as an pillar industry to the nation's economic development, and will continue to monitor the sector's changes to further consolidate the results of macro control," Sheng noted.