BEIJING, April 15 (Reuters) - China’s residential land price gains slowed for the first time in nearly two years in the first quarter, and are likely to slow further in the second quarter, the land ministry said on Tuesday, another indication the property market is losing steam.
The average price of land for residential homes rose 2.1 percent to 5,139 yuan ($830) per square metre in 105 major cities in the first quarter from the previous quarter, according to a report released by the China Land Surveying and Planning Institute, a research unit under the ministry.
That marks a slowdown from a gain of 2.6 percent in the fourth quarter of 2013 and the first easing since the second quarter of 2012.
The slowdown, a prelude to easing home prices, adds to evidence that China’s red-hot property market has lost some steam since late 2013 as local governments tightened controls on speculative buying, and as banks made it harder for home buyers and small developers to get loans.
The institute said the easing trend is likely to be sustained in the second quarter as the broader economy still faces “relatively big” downward pressures.
“Land prices will probably stop rising or begin to drop in some cities in the second quarter,” it said in the report on its website, www.landvalue.com.cn.
Compared with a year earlier, land prices for residential homes still rose 9.5 percent in the quarter, quickening from last quarter’s 9.0 percent annual growth, it added.
Other official figures have shown that China’s home price rises slowed to a six-month low in February as some developers started to cut prices. Data for March will be released later this week.
A recent Reuters poll showed that China’s home price inflation is likely to slow in 2014 compared with the previous year, while some small cities plagued with oversupply might see a price correction. ($1 = 6.2191 Chinese yuan) (Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Chris Gallagher)