Land price growth slows in Q1, signaling cooling property market

China's land price growth slowed for the first time in 21 months in the first quarter of this year, the -Ministry of Land and Resources said Tuesday, a latest sign that the country's property market is cooling.

The average land price, based on prices of land for commercial use, residential homes and industrial production, was 3,412 yuan ($554) per square meter in 105 monitored cities in the first quarter of 2014, up 1.89 percent from the previous quarter, according to a report released by the China Land Surveying and Planning Institute (CLSPI) under the ministry.

The growth rate marked a decline of 0.17 percentage points from the previous quarter and is the first slowdown in seven quarters, the report said.

The average price of land for residential homes rose 2.11 percent quarter-on-quarter to 5,139 yuan per square meter in the first quarter, a slowdown by 0.53 percentage points from the previous quarter, according to the report.

As the downward pressure of the economy is still big and the central government continues to implement a proactive fiscal policy and prudent -monetary policy, price gains for land for commercial use and homes will further mo-derate in the second quarter, Zhao Song, a CLSPI official, said at a press conference held in Beijing Tuesday.

"Sales of homes have declined in recent months due to the tightening of credit and also because many homebuyers are adopting a wait-and-see attitude to wait for bigger promotions from developers," Zhang Haiqing, director of Centaline Property Research Center in Shanghai, told the Global Times on Tuesday.

"The government must have talked to developers, and realized sales are slack. It has cut down on land supply and prices dropped accordingly," Zhang said.

Signs of a cooling property market already appeared earlier this year. Property investment grew 19.3 percent year-on-year in the first two months of the year, which is 0.5 percentage points slower than the annual growth in 2013, data from the National Bureau of Statistics showed in March.

Sales of properties including residential homes, offices and commercial premises fell 0.1 percent year-on-year in terms of floor space in the first two months of this year and declined 3.7 percent in terms of value.

The central government pledged in its government work report in March that China will continue to curb speculative demand for investment purposes, enhance the construction of affordable housing and adopt different macro-control measures on different cities.