The median prices for new homes in 70 major Chinese cities grew 8.7 percent last month from a year ago. This was less than January’s 9.6 percent increase. When calculated on month-on-month basis, home price growth slowed down to 0.3 percent, down from 0.4 percent in January.
Prices in Shenzhen and Beijing each grew 0.2 percent in February from the previous month, according to the National Bureau of Statistics. This figure was 0.4 percent in Shanghai and 0.5 percent in Guangzhou.
Overall, prices grew in 57 out of the 70 cities tracked by the government. In January, this figure was 62. Recently, tighter lending by banks and local government restrictions has seen the surge in home prices lose steam. This news is welcome to the Chinese government, which has in recent years been trying to control the rising prices amidst worries about a possible house bubble.
The Shanghai Stock Exchange Property Index closed 0.9 percent lower on Tuesday; the only barometer that fell among the five industry categories on Shanghai Composite Index, which grew 0.1 percent.
The sudden slowdown in the property prices could however fuel speculation on bad debts and weigh on the Chinese economy, which posted weak growth in January and February.
Zhejiang Xingrun Real Estate Company, which is based in Zhejiang Province, has indicated that lacks enough cash to repay creditors. It owes 15 local banks 2.4 billion yuan ($388.5 million), with China Construction Bank Corp holding debt worth 1 billion yuan.
To contact the reporter of this story; Jonathan Millet at email@example.com