The average price of new homes in 70 Chinese cities fell year over year in September for the first time in nearly two years, as property developers continue to cut prices to lure home buyers.
The drop is yet another signal of a flagging property market, which poses one of the biggest risks to China's slowing economy.
The average price of new homes declined 1.1 per cent in September compared with a 0.5 per cent gain in August.
The reading marks the first drop since December 2012 when prices fell 0.1 per cent. On a month over month basis, prices in September continued to fall for the fifth straight month, down 1 per cent compared with a 1.1 per cent fall in August, according to calculations by The Wall Street Journal.
Many economists and investors are concerned that a worsening slump in the property market could cause a sharper-than-expected slowdown in the world's second largest economy.
Analysts estimate that real estate accounts for nearly one-quarter of gross domestic product, factoring in construction, cement, steel, chemicals, furniture and other related industries. China's economy grew 7.3 per cent in the third quarter this year, its slowest pace in five years.
Excluding public housing, private-sector home prices fell in 58 of the 70 cities in September from a year earlier, up from the 19 cities that posted declines in August. On a month-over-month basis, home prices fell in 69 of the 70 cities in September.
In recent weeks, the authorities have introduced measures to prop up the housing market. The central bank in late September loosened mortgage restrictions by extending qualification for first-time buyers' preferential rates and terms to existing homeowners.
Housing transactions have picked up in September, the start of the traditional peak season, compared with August. Analysts noted more favorable home buyer terms would likely boost sales in the coming weeks, but that those measures wouldn't quickly solve the longer-term issues of excess inventory and rising leverage.