2nd LD-Writethru-China Focus: China house prices continue to stabilize

China's hot property market in major cities has continued to stabilize after authorities took a series of measures to contain prices, according to an official survey Wednesday.

Of 70 large and medium-sized cities surveyed, 46 saw prices for new residential housing climb month on month in December, down from 55 in November and 62 in October, according to the National Bureau of Statistics (NBS).

In Beijing, new residential house prices dipped 0.1 percent month on month, while Shanghai prices fell 0.2 percent. House prices in Shenzhen, a southern metropolis neighboring Hong Kong, slid 0.4 percent.

Year on year, house prices in the three cities have risen 28.4 percent, 31.7 percent and 23.8 percent, respectively.

According to the NBS, new residential house prices in second-tier cities rose 0.2 percent on a monthly basis, retreating 0.2 percentage points from the growth seen in November.

Third-tier cities saw new residential house prices gain 0.4 percent month on month, down from a 0.8 percent increase in November.

"Monthly growth in the country's 15 first-tier and major second-tier cities have slowed and house prices have stabilized as local governments' tightening measures took effect," said NBS statistician Liu Jianwei.

Since October, dozens of Chinese cities have announced measures, including purchase limits and tightened mortgage restrictions, to prevent prices rising out of control.

The latest round of property restrictions came after two years of progressive policy easing, starting with the relaxation of purchase restrictions in 2014. The momentum was further fueled by the government's pro-growth policies, including interest rate cuts and lower deposit requirements.

The sector's recovery, however, has been uneven, with economically strong areas reporting drastic price rises, and less developed areas still reporting huge inventories of unsold houses.

China's leaders have pledged to strictly limit credit flowing into speculative buying in the housing market, and curb asset bubbles in 2017.

At the Central Economic Work Conference last month, policymakers called for comprehensive measures to build a market-oriented and long-term mechanism that could curtail a property bubble and prevent big market fluctuations.

In cities where prices are rising fast, governments should increase land supply and the share of residential housing, according to a statement released after the conference.

Huang Yu, a senior researcher at the China Index Academy, said that major cities would likely see a moderation in house prices in 2017 after a year of rapid increase, while some third and fourth-tier cities would have more room to grow as their prices remained relatively low.

"Home owners may face a period of stagnation in house prices this year, as governments will continue with strict tightening measures," said Zhu Xu, secretary to the president of China Vanke, the country's largest residential developer.

However, authorities will be walking a tightrope between curbing excessive price gains and clamping down too hard on a sector which has proved to be a significant growth driver.

A surging real estate market and government stimulus helped drive the country's economic growth in 2016.

Official data showed China's economy grew 6.7 percent in the first three quarters. The NBS is set to announce key economic indicators including the whole-year growth rate on Friday.

Market watchers say the country is on track to meet the full-year target between 6.5 and 7 percent. Endi