* China Feb new home prices up 5.7% vs 5.9% in Jan -Reuters
* Prices fell in 9 cities, flat in another 5 in Feb m/m
* More developers to cut prices later this year - analyst
By Langi Chiang and Simon Rabinovitch
BEIJING, March 18 (Reuters) - China’s property prices increased at their slowest pace in more than a year in February after a succession of policy moves by the government to cool the real estate market.
New home prices in 70 major Chinese cities rose 5.7 percent in February from a year earlier, down from an annual rise of 5.9 percent in January, according to a Reuters weighted average of official data published on Friday.
With prices still rising, albeit more slowly, there is little chance of the government relaxing its tightening stance, and developers could be forced to cut prices more sharply later this year as transaction volumes fall, analysts said.
“The real estate market will be very sluggish this year,” said Hui Jianqiang, head of research at E-House China in Shanghai.
New home prices increased by 6.8 percent in Beijing in February from a year earlier, level with January’s pace, the National Bureau of Statistics said. In Shanghai, prices rose 2.3 percent year on year, up from 1.5 percent in January, the NBS said in a statement on its website.
It added that new home prices rose in 68 of the 70 cities in February from a year earlier.
On a month-on-month basis, property inflation was more muted.
Nationwide, prices were up 0.4 percent, compared with a 0.8 percent increase in January, according to the Reuters calculations.
New home prices fell in nine cities in February from a month earlier. Three cities had posted declines in January, the NBS said.
China has taken a slew of steps to contain property inflation since late 2009, including a trial of a long-debated property tax in Shanghai and Chongqing that began in January.
The Chinese statistics agency tracks residential property price changes in 70 major cities, but stopped publishing a nationwide index after it changed the way it collects data at the start of this year.
That has made it difficult to get a broader sense of how China’s real estate market is performing. The Reuters weighted average helps fill that gap. Checked against previous years, the Reuters method tracked the reported nationwide changes and accurately flagged key turning points.
The slower increase in property price inflation is reasonable as a correction to rapid surges last year, Hui said. A deeper slide is possible towards the end of the year if the country’s largest developers begin to cut prices, he added.
“It all depends on how long the government will maintain its caps on the number of additional homes each family can buy,” Hui said.
Yan Qingmin, assistant chairman of the China Banking Regulatory Commission, said earlier this month that the government’s focus was on implementing already-announced property tightening measures rather than introducing any new ones.
China has raised interest rates three times and banks’ reserve requirements five times since October, but it has been one months since its last policy move.
The central bank will re-assess its tightening policies in the wake of Japan’s devastating earthquake last week, but any pause will be temporary because inflation remains elevated, analysts said on Friday. (Editing by Ken Wills)