* Sept home prices fell for 1st time y/y in nearly two years
* Prices down 1.0 pct on month, fifth straight fall
* New home prices fell m/m in record 69 cities
* Sales improved on easier mortgages
(Adds detail, GDP forecast, jobless rate)
By Xiaoyi Shao and Clare Jim
BEIJING/HONG KONG, Oct 24 Chinese home prices
fell for a fifth straight month in September, wiping out gains
scored in the past year and raising expectations the government
will have to implement more economic support measures to
cushion the blow.
The monthly falls left average home prices in 70 major
Chinese cities down 1.3 percent in September from a year
earlier, the first such drop since November 2012.
New home prices fell month-on-month in a record 69 of the 70
major cities, up from 68 in August. Only the southern city of
Xiamen saw stable prices last month, National Bureau of
Statistics (NBS) data showed.
The worst performance was in the eastern city of Hangzhou,
where prices sagged 7.6 percent in September from a year before.
The decelerating property market, which accounts for about
15 percent of China's economy, has crimped demand in 40 sectors
ranging from steel to cement and furniture.
"The property downturn is still the main drag on the
economy," Wang Tao, an economist at UBS in Hong Kong, said in a
"The negative impact of the ongoing property downturn is
being felt not only in heavy industry, but also in manufacturing
The slowdown in the housing market followed GDP data showing
the economy grew at its slowest rate since the 2008/2009 global
financial crisis in the September quarter, adding to worries
that it will drag on global growth.
Yu Bin, a senior economist at the Development Research
Centre (DRC), the cabinet's think tank, said on Friday it
expected China's economy would grow by 7.4 percent this year,
slightly below the government's target of 7.5 percent. That
would be the slowest pace in 24 years.
Chinese officials have indicated they would be willing to
tolerate slightly slower growth as long as the job market
continued to hold up, so there was some relief in the form of
steady unemployment data on Friday.
China's urban registered unemployment rate was 4.07 percent
at the end of September, down slightly from 4.08 percent at the
end of the second quarter, the labour ministry
A government spokesman said the 10.82 million new jobs
added so far this year had already exceeded the full-year target
of 10 million, mainly due to a strong service sector.
NO QUICK RECOVERY
In late September, China cut mortgage rates and downpayment
levels for some home buyers for the first time since the 2008/09
global financial crisis, its boldest step yet to energise an
economy increasingly threatened by a sagging housing
Although transaction data from private real estate
consultancies pointed to a pick-up in sales in recent weeks, the
impact of new government measures to provide cheaper loans to
second-home buyers remains uncertain.
"It still takes time to see whether a recovery of home sales
will affect home prices," Liu Jianwei, a senior statistician at
the National Bureau of Statistics (NBS), said in a statement
accompanying the data.
Analysts concurred it was too early to tell if government
moves in late September to lower mortgage rates and down payment
requirements would be enough to stem the price slide.
And even if prices do stabilise, developers will remain
reluctant to start new projects until a glut of unsold homes is
worked off, depressing demand for raw materials and keeping
pressure on labour markets.
"You can't expect to feel the impact of policy measures right
away. Liquidity is increasing and the real estate sector is
driven by liquidity so prices will gradually improve," said a
The number of potential buyers and sellers of properties
increased significantly in October, but the negotiation process
has also grown more demanding as sellers become more confident
in the market outlook, a real estate agent in Shanghai said.
Meanwhile, Chinese developers are turning to offbeat
marketing gimmicks and give-aways as they battle to shift their
massive inventory, including resort stays for buyers.
(Additional reporting By Judy Hua and Kevin Yao; Editing by