This photo taken on March 15, 2024 shows the construction site of a residential complex under an urban renewal project in Jing'an District of east China's Shanghai. [Photo/Xinhua]

Major Chinese cities saw home prices fall in July compared to the previous month, though the declines continued to narrow, aided by favorable policies, according to data from the National Bureau of Statistics (NBS) released on Thursday.

New home prices in China's first-tier cities, namely, Beijing, Shanghai, Guangzhou and Shenzhen, fell 0.5 percent month on month, unchanged from the previous month.

While those in the second-tier cities fell 0.6 percent month on month, with the decrease narrowing by 0.1 percentage points from the previous month, the NBS said.

Prices of second-hand homes in second-tier and third-tier cities both went down 0.8 percent in July, with the decreases narrowing by 0.1 percentage points from the previous month, the NBS data showed.

On a yearly basis, the decrease of China's home prices expanded slightly overall last month. However, the drop in sales prices for second-hand residential properties in first-tier cities continued to narrow, according to the NBS.

China is accelerating its formation of a new property sector development model and improving the housing supply system that includes both commercial homes and affordable housing, according to a State Council executive meeting held in June.

It has rolled out a slew of policies to bolster the real estate sector, including cutting minimum down payment ratios, abolishing the commercial mortgage rate floors for first and second homes, and establishing a re-lending facility that supports local state-owned enterprises to use those funds to buy commercial homes for affordable housing.

Thanks to the series of favorable policies, major Chinese cities are showing more signs of a warming housing market. From January to July, the sales area of newly built commercial housing decreased by 18.6 percent year on year, with the decline narrowing by 0.4 percentage points compared to the period from January to June, the NBS said.

Housing sales value decreased by 24.3 percent year on year, with the decline narrowing by 0.7 percentage points. Bolstered by policies like the white list mechanism, which helps cash-strapped developers access credit, the funds available for real estate development enterprises fell by 21.3 percent in July, with the decline narrowing by 1.3 percentage points.

In July, China took steps to boost its property sector by cutting the over-five-year LPR, which many lenders use to set mortgage rates, by 10 basis points to 3.85 percent.

At a key meeting held at the end of July, China pledged active support for the purchase of commodity housing inventory to be used as affordable housing to ensure stable and sound development of the country's property market.

China will continue to combine the digestion of existing inventory with the optimization of incremental growth in the property sector, NBS spokesperson Liu Aihua told a press conference.

It will further improve the work of ensuring the delivery of houses and accelerate the formation of a new model for real estate development, Liu added.