The growth of home prices in China slowed slightly in May after more cities rolled out stricter measures to curb demand.
The average price of new homes in 70 cities rose 0.7% in May from April, excluding government-subsidized housing, according to calculations from The Wall Street Journal based on data released Monday by the National Bureau of Statistics.
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On a year-over-year basis, average new home prices rose 9.7% in May, compared with a 9.9% increase in April.
The pace of home-price growth moderated following stricter home-purchase policy restrictions in many cities.
Momentum slowed in big cities but picked up in smaller cities, underscoring a widening divergence in China's property market.
Home prices rose 3.4% in Bengbu, a midsize inland city, and advanced 2.6% in southern Zhanjiang in May from April.
Among the big cities, Guangzhou home prices rose 0.9% for the same period. Beijing and Shanghai were flat.
New-home prices rose in 56 of 70 cities in May from a month earlier, compared with 58 cities in April. Prices of new homes increased in 69 cities in May from a year earlier, compared with 69 in April.
"It's clear that prices are still rising but at a slower pace," said Larry Hu, a China economist at Macquarie Group. "Looking ahead, the headwinds will be stronger for the second half and especially for next year."
The two main reasons are higher effective mortgage rates and front-loading of housing sales, both of which will curb demand for homes, Mr. Hu says.
Smaller cities also have limited population inflows and less developed second-home markets, which means the recent uptick in prices there likely won't last.
"Once people there have bought up property, their next home [purchase] might be five years later," Mr. Hu says.
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(END) Dow Jones Newswires
June 18, 2017 22:36 ET (02:36 GMT)