August 2, Home prices in 100 key Chinese cities in July averaged RMB 8,874 per square meter, up at a slower pace of 0.21% from June, according to data compiled by the China Index Academy.

Over 30% of the 100 cities have seen average home prices go down month-on-month on expectations of stronger tightening measures in China’s lower-tier cities.

“Though home prices are still rising, the pace is much slower than the same period last year,” Zhang Hongwei, director of research at local consulting firm Tospur Consulting, was quoted as saying by Chinese news portal NetEase.

Zhang said China’s home prices would remain at large stable in the remainder of the year, but it’s possible that some developers will have to lower their property prices to withdraw cash.

The China Index Academy data showed that of the 100 cities, 33 had seen drops in average home prices from June, and prices continued to climb in another 66 cities.

As Beijing is expected to outline more measures to curb soaring housing prices -- with the most likely effort being made to limit home-buying in more second and third-tier cities -- developers are scrambling for means to cope with the trend, especially for those with a large proportion of projects located in those smaller cities.

Country Garden Holdings Ltd. (2007.HK) took the lead in slashing prices by offering a discount of as much as 25% at a Huizhou, Guangdong-based project .

That is expected to prompt more developers with flats in the same area to follow suit -- on the one hand to avoid pricing disadvantages and on the other hand to offload as many units as possible, given their mounting house inventory levels.

edited by Kendra KE