China’s home prices dipped for the eighth straight month in May but the pace of decline eased, fanning talk that the market may be bottoming out and that recent monetary stimulus could set the stage for a rebound.

Home prices in the world’s second-largest economy have fallen month-on-month since October, after China tightened policy more than two years ago to take the steam out of sizzling home prices.

Still, Beijing reaffirmed hours after the data it would keep property tightening measures in place.

Prices have declined but the cumulative drop is still mild, analysts say, keeping home prices near record highs and out of reach for the majority of China’s burgeoning middle class. If Beijing moves to loosen restrictions now, it may mean the economy is slowing faster than expected.

Average new home prices fell 0.1 per cent in May from a month earlier, narrowing from April’s fall of 0.3 per cent, according to calculations based on home price data in 70 cities published by the National Bureau of Statistics. – (Reuters)