Home sales growth begins to taper off

China's real estate sector continued to recover in June but at a slower pace, the National Bureau of Statistics said on Monday.

According to the NBS, fewer cities saw month-on-month housing price increases and more saw month-on-month declines in June.

Fifty-five of the 70 large and medium-sized cities monitored by the NBS saw new home prices rise month-on-month in June, compared with 60 in May. Forty-eight cities saw a month-on-month existing home prices increase in June, down from 49 in May.

New home prices declined in 10 cities in June, compared with only four in May, and existing home prices fell in 14 cities, compared with 13 in May.

In addition, the increase in housing prices slowed down. According to Liu Jianwei, an NBS statistician, the average monthly new home price increase in the 70 cities narrowed in June by 0.1 percentage points and of existing homes by 0.2 percentage points.

But housing price trends diverged in the various cities. Month-on-month increases widened slightly in first-tier cities in June but continued to taper off in second- and third-tier cities, said Liu.

In the first half of 2016, real estate investment increased by 6.1 percent year-on-year, 0.9 percentage points lower than that in those of the period January to May.

Property sales saw a year-on-year increase of 27.9 percent from January to June, but that's less than the 33.2 percent increase in the first five months of the year.

China's GDP grew by 6.7 percent in the first half of this year, remaining in the reasonable growth range of 6.5 to 7 percent set by the government. But many researchers expect the slowing trend in real estate to continue in the latter half of the year.

This month, a research group at the Chinese Academy of Social Sciences forecast that property price increases and the growth rate of property investment would both slow in the latter half of the year.

Nomura Securities retained its long-term view of a gradual slowdown of China's property sector in its report on July 18.

Property investment would slow down in the second half of the third quarter, China Investment Securities researcher Zhang Jie wrote in a report on Monday.