For the first time since the government began releasing the data in 2005, housing prices in 70 large and medium-sized Chinese cities fell 0.4 percent year-on-year in December.

Compared with November, property prices were down 0.5 percent, according to a joint statement issued on Friday by the National Development and Reform Commission and the National Bureau of Statistics.

That was only a 0.2 percent increase from the same month in 2007, presenting the lowest growth rate in the past three years.

Analysts said the price decline reflected the impact of economic slowdown on the property sector as well as the building-up of a wait-and-see attitude among home buyers in the hope for further favorable policies and price cuts.

In December, about one third of Chinese cities showed a year-on-year price drop, with southern Shenzhen leading the downward trend by an 18.1 percent dip. Housing prices in cities like Guangzhou, Nanjing and Chongqing all fell more than 5 percent.

Meanwhile, compared to November, prices in 50 cities dropped in December. Southern Guangzhou saw the largest decline which was 3.1 percent.

Statistics showed prices for newly built homes dropped 0.8 percent and older residences fell 0.1 percent over the same period in 2007.

Housing prices dipped after the country issued a series of policies to boost the domestic property market as it had been suffering from shrinking demand and investment amid the global financial crisis.

According to the latest real-estate stimulus package unveiled on December 17 by the State Council, someone who has owned a home for two or more years can now sell it without having to pay business taxes. Previously, owners had to wait at least five years before selling houses tax-free.

If owners sell their houses within two years, they only have to pay taxes levied on the profit, not the sales price.

To boost home buying, the government also allows people with "smaller-than-average" apartments to buy a second apartment under favorable loan terms. Size limits differ in every city.

Previous measures include pledges to build more affordable housing and cut mortgage rates and down payments for first home buyers.

(Xinhua News Agency January 10, 2009)