The average price of new homes in 70 Chinese cities fell for the third straight month in July, as property developers continued to cut prices to reduce inventories amid the market downturn.
The average price of new homes in 70 cities slid 0.89 per cent in July from June, according to calculations by The Wall Street Journal, based on data released Monday by the National Bureau of Statistics.
This compares with a 0.47 per cent on-month fall in June and a 0.15 per cent fall in May, which was the first drop in two years.
On an annual basis, the average price in July rose 2.43 per cent, moderating from the 4.05 per cent increase recorded in June.
Real estate and construction are important drivers of growth in the Chinese economy, accounting for more than 20 per cent of gross domestic product in the world's second largest economy, when cement, steel, chemicals, furniture and other related industries are factored in, analysts estimate.
Excluding public housing, private sector home prices fell in 64 of the 70 cities in July, up from the 55 cities that posted declines in June. Home prices only rose in coastal Chinese city Xiamen and Dali, a city in southwest China, and were flat in the remaining four cities.
Housing sales have slipped this year, falling 10.5 per cent in the first seven months and analysts expect further price cuts as the local governments and property developers continue to grapple with a glut of apartments and tight credit environment. Some property developers have also issued profit warnings on their first half earnings in recent weeks.
In recent months, the local authorities in around 30 cities have also loosened property restrictions to lure buyers back into the market, but there has been little effect.