Potential homebuyers examine a property project model in Nanjing, East China's Jiangsu province, Feb 28, 2016.[Photo/VCG]

BEIJING - China's red-hot property market has shown more signs of cooling down following a series of targeted measures, as the country's economy grows on steady footing.

Milder price gains

Home prices in large and medium-sized cities still registered an uptick in October, but the growth pace was slower than September, evidence of nascent effects of recent tightening moves, experts said.

Breakdown figures showed that new home prices in first-tier cities such as Beijing as well as large second-tier cities across China edged up 0.5 percent and 1.3 percent in October month on month, with growth rates 2.8 percentage points and 1 percentage point lower than September, respectively, the National Bureau of Statistics (NBS) said earlier this week.

Second-hand residential property sales reinforced the trend, as prices of existing homes in first- and second-tier cities rose 0.6 percent and 0.8 percent over the same period, with the growth rates 2.9 percentage points and 1.1 percentage points lower than September respectively.

NBS senior statistician Liu Jianwei attributed the milder price gain to policies rolled out by different local governments to contain spiking prices.

The data were released on the heels of a slew of measures to rein in speculative housing purchases, check the risk of asset bubbles and stabilize the market, with dozens of Chinese cities modifying market rules including higher deposits and more restrictions.

Recent tightening moves have effectively halted the housing price spike trend and helped regulate the market order, said Liu Hongyu, a professor at Tsinghua University, adding that the long-term policy effects still deserve observation.

Sales volume for both new and existing homes continued to trend down in November at a faster pace, with the tightening moves starting to exert ripple effects for other cities that have not seen such moves, observed Cheng Yun, a senior analyst at Centaline Property, a leading Chinese real estate agency.

The view was echoed by Xia Dan, a senior researcher at the Bank of Communications, one of China's top five lenders, who predicted that housing sales will further decelerate in November.

Firm footing

Housing is an essential sector in many economies including China, but it has been a source of vulnerability and financial crisis in some economies. The Chinese authorities are guarding against an unsustainable housing boom and facilitating reforms to channel resources into the real economy.

China's economic stabilization is truly sustainable without fast expansion of the property sector, said Jiang Chao, a senior analyst at Haitong Securities.

Despite the difficulty of transitioning to a more consumption and innovation-driven economy, a string of recent data pointed to the fact that the economy is growing on a firm footing. Some economists rejected worries that efforts to contain housing prices will cause the economy to lose momentum.

Policies to curb property bubbles may weigh on sectors related to the housing market around the second quarter of next year, but the impact might be limited, predicted Ren Zeping, chief economist at Founder Securities.

China's industrial output expanded 6.1 percent in October, largely due to strong performance in the high-tech and equipment manufacturing sectors. It is the eighth consecutive month industrial output has exceeded 6 percent.

China's service sector grew at its fastest pace in four months, braced by growing new orders, with the Caixin China General Services PMI (Purchasing Managers' Index) standing at 52.4 in October.

Despite anemic foreign trade demand, China's economy is stabilizing if judged from the perspective of company output, Jiang said, adding that the pace of China's consumption growth has remained tepid in recent months.

The most important task for the Chinese economy is reform, including reforms targeted at restructuring state-owned enterprises (SOEs) and improving growth quality, Jiang said.