* Government measures, tightening liquidity conditions help
* More signs showing rises will ease this year
* But prices to remain elevated in main cities
* Shares in property firms fall on reports of bank lending
(Updates with Industrial Bank statement)
BEIJING, Feb 24 China's home price rises eased
for the first time in 14 months in January, the latest sign that
the government's more than four-year campaign to rein in
property risk may finally be starting to bite.
Average new home prices in China's 70 major cities rose 9.6
percent in January from a year earlier, easing from the previous
month's 9.9 percent rise, according to Reuters calculations
based on data released by the National Bureau of Statistics
(NBS) on Monday.
It was the first slowdown in the rate of price increases
since November 2012.
House prices in China have surged in the past year but the
market began to show signs of losing momentum at the end of 2013
as local governments took further tightening measures at the
prompting of a central government worried about the risk of an
"Because of the effects of a series of government measures
including tightening curbs in some cities and an increasing
supply of affordable housing, the market environment and pricing
expectations were relatively stable," said Liu Jianwei, a senior
statistician at the NBS.
"Tightening credit conditions and easing pressures from
housing inventories also helped home sales to drop, which in
turn eased the home price rises further in some cities," Liu
said in a statement accompanying the data.
Prices in the capital Beijing rose 14.7 percent in January
from a year earlier, easing from December's year-on-year
increase of 16 percent, and the third month of slowing gains
after a record jump in October.
Shanghai price gains eased to 17.5 percent in January from a
year ago, versus 18.2 percent annual growth in December.
Home sales were also likely to have cooled in most major
cities in January due to the Lunar New Year holiday, when
business activity slows markedly.
With China's annual parliament session coming up in March,
analysts are also looking ahead to the possibility of further
price-calming measures being announced, making it difficult to
predict whether the slowdown will continue.
However, many analysts expect gains to moderate this year on
relatively tight liquidity and subdued demand following strong
demand seen in 2013.
NBS housing data at the end of last year had shown the first
signs that the relentless rises of 2013 were coming to an end,
and a growing number of experts and developers are no longer as
optimistic on the sector. Some have started to talk about
Adding to concerns over the market, the official Shanghai
Securities Journal said on Monday that China's Industrial Bank
Co Ltd had suspended some types of property-related
loans, although several other banks have kept property loan
Industrial Bank later confirmed in a statement that it had
halted mezzanine financing for the real estate sector which
accounts for a small portion of its overall lending business,
pending new rules on its property-related loans to be unveiled
by the end of March.
Shares in property developer China Vanke Co Ltd
fell 6.6 percent on Monday after the report, while China
Resources Land Ltd ended down 6 percent.
Mortgage lenders including Agricultural Bank of China Ltd
, Bank of Communications Co Ltd and China
Merchants Bank Co Ltd did not respond to calls.
Separately, media reported that some property developers in
the eastern city of Hangzhou had started to cut home prices as
some of them are in urgent need of cash.
The NBS figure showed Hangzhou's home prices dropped 0.1
percent in January from the previous month, along with four
other cities that saw month-on-month drops in January.
However, developers in Shanghai reached by Reuters on Monday
said they had no plan to cut prices and were not concerned about
the talk of bank lending curbs.
"The rumours will not influence us. Lingang is very popular
now and the price will only go up," said a salesman at a
Shanghai-based property firm, referring to a property
development in the city's Pudong district.
Analysts, however, said that tighter liquidity and moderate
home sales this year may force developers to become more
reasonable about pricing their projects.
"We do not rule out the possibility of more projects
employing price-cutting strategies due to various project or
company-specific reasons," Alvin Wong, a property analyst at
Barclays, said in a research note.
"Nevertheless, we think the chance for substantial price
cuts to spread over the whole sector remains slim," Wong said.
China's property market has seen a divergence between big
cities, where strong demand and short supply have pushed up
prices rapidly, and small ones, where rises have tended to be
slower on soft demand.
"Property price differences between first- or second-tier
and third- or fourth-tier cities can be expected to remain
noticeable over coming months," Weibin Xu, a senior consultant
at EC Harris, said in an emailed comment.
Another factor working against government measures is a hot
land market in some main cities.
Combined revenues from land sales in Beijing, Shanghai,
Guangzhou and Shenzhen reached 81.9 billion yuan ($13.5 billion)
in January, more than twice that in the same period last year,
according to data from China Real Estate Information Corp, a
property data provider.
($1 = 6.0914 yuan)
(Reporting by Xiaoyi Shao and Jonathan Standing; Additional
reporting by Clement Tan in Hong Kong, Gabriel Wildau in
Shanghai, and the Shanghai newsroom; Editing by Chris Gallagher
and Robert Birsel)