China property prices fall on policy pressure

Property prices in 70 Chinese cities fell in October for the first time in two years, in response to government policies to cool the housing market, The Wall Street Journal reported. Analysts expect the correction to continue; some predict by as much as 25%. Real estate developers are under pressure from the government to rein in housing prices, but also must contend with past investors who have seen property values fall. The average decline is small – just 0.13% for new homes – and could signal a gradual decline. “The current price situation is probably ideal from the government’s perspective, as it is quite stable,” said Chen Jie, of the Fudan Center for Housing Policy Studies. Premier Wen Jiabao said earlier this month that tightening measures would not be eased. This may keep buyers from returning to the market if they believe prices will continue to fall.