Home prices fall year-on-year

Average home prices in 100 Chinese cities saw a year-on-year fall for the first time in the past 10 months as the government tightening measures continue to bite.

They fell 0.71 percent in April from a year earlier, statistics from China Real Estate Index System showed on Tuesday.

Meanwhile, the average home prices in the country's 100 cities declined 0.34 percent in April over the previous month, the eighth consecutive fall on a monthly basis, according to the index, which is affiliated with China's largest online real estate company Soufun Holdings.

"That indicates a further cooling down in the country's real estate market amid the persisting tightening measures," said He Tian, director of research at China Index Academy, a Beijing-based real estate research institute.

"As the property developers' cash flow further tightens, we believe the property price in the country's key cities such as Beijing and Shanghai will slide 5 to 10 percent this year, while the second- and third-tier cities may see a drop of more than 10 percent," He added.

Statistics from the index showed that the average home price in the 10 biggest cities, including Beijing and Shanghai, stood at 15,391 yuan ($2,443) a square meter in April, down 2.6 percent year-on-year. This is the fourth consecutive fall on a yearly basis.

According to a recent report by Standard Chartered Bank, developers are a little more confident about apartment sales. Price cuts of 10 to 20 percent are apparently helping to nurture demand.

"Inventories are still rising, although not spiraling upwards. Developers expect more cuts of up to 20 percent," said Stephen Green, an economist at Standard Chartered Bank.