1st LD: China's housing market continues to show signs of life

China's housing market continued to show signs of improvement after a prolonged downturn, with new home prices dropping in fewer cities for a third month amid recovering market confidence and lower interest rates.

On a monthly basis, new home prices fell in 43 of the 70 cities monitored by the government in May, down from 48 in April, according to data released on Thursday by the National Bureau of Statistics (NBS). Prices climbed in 20 cities, up from 18 in April.

Year on year, 69 cities reported new home price drops, with Shenzhen being the only exception, with a 7.5-percent increase.

While the market largely remains anemic, home price rises in some first-tier cities are gaining momentum, backed by the government's support policies.

According to NBS statistician Liu Jianwei, average new home prices in top-tier cities gained 1.7 percent on a monthly basis in May, while those in some smaller third-tier cities declined.

The cities of Beijing, Shanghai, Guangzhou and Shenzhen saw their new home prices up 3 percent month-on-month in May.

For existing homes, 28 cities saw price declines in May on a monthly basis, five reported flat prices, while 37 cities posted gains.

A persistent weakness in the property sector and shrinking exports due to sluggish external demand, dragged China's economic growth to 7 percent in the first quarter, its lowest level in six years.

The central bank cut benchmark interest rates three times since November and lowered the banks' reserve requirement ratio twice since February to combat the economic slowdown.

To help the emerging signs of improvement in the property sector, the country also eased down payment requirements for second-home purchases and some local governments have rolled back their restrictions on home purchases. Endi