HOME prices in China rose for the 12th straight month in May, but the pace of growth continued to fall.

The average price of new residential properties in 100 cities was up 0.81 percent from April to 10,180 yuan (US$1,642) per square meter, the China Index Academy said yesterday. That compared to a 1 percent gain in April and March's 1.06 percent rise.

Of the 77 cities that posted gains, 43 saw increases of more than 1 percent. In April, 76 cities recorded month-on-month growth, with 40 registering a rise above 1 percent.

Xiamen in the southeast led last month's gainers with a 3.55 percent rise. Twenty-two cities recorded price drops, with Xi'an recording the biggest decrease of 1.74 percent. Prices in the central city of Luoyang remained flat.

The academy said developers and buyers were increasingly adopting a more prudent approach and home prices were rising more slowly as a result.

"However," it added, "expectations for further home price growth still remain strong as land markets gradually picked up their strength in major cities including Beijing and Shanghai, home supply in some key cities remained tight, and expectations of looser monetary policy were unchanged."

In the country's 10 largest cities, the average price of a new home rose 1.05 percent to 17,202 yuan per square meter in May compared to April's 1.31 percent rise.

Guangzhou led with a 2.52 percent gain, followed by Chengdu's 2.1 percent. In Beijing and Shanghai, home prices rose 1.97 percent and 0.23 percent.

Research by Shanghai Uwin Real Estate Information Services found that new home sales in the city edged up 2.2 percent in May to more than 920,000 square meters, the second straight month they were below the average 957,000 square meters over the past 12 months.

The average cost of new homes fell nearly 3 percent from April to 23,219 yuan per square meter, amid comparatively robust sales of medium to low-end houses in outlying areas.

New home sales in Shanghai rose for the second week with mid to high-end houses most in demand.

Purchases of new residential properties, excluding government-funded affordable housing, rose 19 percent to 257,000 square meters in the seven days to Sunday, according to a Shanghai Deovolente Realty Co report.

The average cost, meanwhile, jumped 15.7 percent to 25,268 yuan (US$4,075) a square meter, a 13-week high, fuelled by sales in mid to high-end segments.