SHANGHAI (BLOOMBERG) – Home-price growth in China slowed for a second straight month, adding pressure to the world’s second-largest economy which is being hit by trade and currency headwinds.

New-home prices, excluding government-subsidised housing, gained 0.59 per cent on average in July from June in 70 major cities, data released by the National Bureau of Statistics showed on Thursday (Aug 15). That’s the smallest increase since February.

After a spurt in home prices earlier this year, China has tightened property curbs in an attempt to keep a lid on the property market. Even after the economic slowdown deepened, authorities dashed hopes that they may ease curbs, vowing not to use real estate as a short-term stimulus.

Home prices will likely correct mildly during the rest of the year as developers cut selling prices to speed up sales, said Shen Lan, China economist at Standard Chartered Bank (China) Ltd.

As the property market slows, investor focus will shift to whether the government is able to cushion the impact on the economy. Credit demand tumbled in July partly due to a clamp down on property lending.

A prolonged slowdown in price growth may hurt residential developers. Some, including China Evergrande Group, are already grappling with a drop in sales, compounding their woes under an array of measures aimed at curtailing funding avenues.