China home price fall is first in almost two years

Average new home prices slipped 0.3% in May from April, the first decline since June 2012, according to China Real Estate Index System. On a Y/Y basis, prices rose 7.8% vs. 9.1% in April and 10% in March. Of 100 cities surveyed in May, 62 showed declining prices vs. 45 in April.

At issue seems to be a backing off by buyers outside of major cities like Beijing or Shanghai amid worries of further price cuts and trouble getting mortgages, and a property analyst with CIMB Securities sees home prices falling 10-15% in second-tier cities.

Housing starts across the country have slid 9.9% by value through April of this year from a year earlier.

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