New homes in 100 cities cost $1,600 per square meter on average in April

Property prices in China's major cities rose for the 11th consecutive month in April, according to a report, but the growth rate slowed down slightly as the government's latest tightening policies gradually kicked in.

Figures released on Thursday by China Index Academy, a Beijing-based real estate research institute, showed the average price of new homes in 100 cities monitored was 10,098 yuan ($1,600) per square meter during April, up 1 percent over the previous month.

The month-on-month growth rate, according to the academy's figures, is down 0.06 percentage point from March.

A total of 76 cities saw price increases on a monthly basis in April, compared with 84 in March.

On a yearly basis, the growth was 5.34 percent last month, compared with a 3.9 percent year-on-year increase in March. It was the fifth time that the 100 cities saw a price hike on a year-on-year basis, with the growth rate further accelerating.

The average house price in key cities, including Beijing and Shanghai, was 17,023 yuan per sq m, an increase of 1.31 percent from the previous month and up 7.89 percent over the same period last year, still indicating an accelerating price growth rate.

"In key cities and some second-tier cities, there is still pressure for a further price hike as the demand-supply imbalance has not improved yet," said Huang Yu, the academy's vice-president.

But such a situation may change soon, as the latest tightening policies, especially the pricing limitation policy in Beijing and Guangzhou, begin to work, industry analysts said.

Max Chen, a senior manager of residential sales at international property agency Savills, said the price restriction policy in Beijing has already weighed on property developers in the capital city.

Among Beijing's detailed regulations following the introduction of the State Council's measures to cool the real estate market, the municipal government will not grant sales licenses to projects priced "much higher" than the average rate in the region.

So far, a number of real estate projects in the capital have failed to get sales licenses after planned sales prices were deemed to be much higher than previous projects or average prices in the region.

"I believe property developers can survive the capital pressure for around six months. If there are more rigorous measures rolled out during the period, such as a further hike in mortgage rates for second-home buyers and the levy of a property tax, then they will have a really difficult time," said Chen.

Chen said prices have to be stabilized over the coming months, given the pricing restriction policies, though property developers are striving to figure out ways to dodge the rules.