Average home price drops 0.5 pct in June

Housing prices in China fell at a faster pace in June as weakness extended for the second month following a near two-year rally, a report released today by the China Index Academy showed.

The average price of new homes in 100 cities dropped 0.5 percent from May to 10,923 yuan (US$1,762) per square meter, the academy said. That compared to a 0.32 percent decrease in May, which was the first month-on-month retreat since June 2012.

"The housing market has entered a correction period with most cities suffering high inventories while home searchers remain reluctant to seal a purchase deal," the academy said. "We expect housing prices to keep going southward in the second half of this year though demand from buyers may possibly pick up at a slow rate."

Nationwide, prices in 71 cities fell from a month ago, compared to 62 in May. Of these, 35 cities posted drops of more than 1 percent, an increase of five from a month earlier.

In the 10 largest cities, the average price of a new home shed 0.45 percent to 19,517 yuan per square meter, compared to a 0.18 percent dip in May.

Of the 10 cities, Shanghai, where home prices climbed 0.25 percent, was the only city that recorded a month-on-month rise. Hangzhou led all decliners with a 2.1 percent decrease.

The price of new homes in the 100 cities rose 6.48 percent year on year, up for the 19th straight month. But it did rise at a slower pace in June for the sixth consecutive month, the academy said.