BEIJING (Reuters) -China’s new home prices increased at their slowest pace in several months as authorities stepped up efforts to rein in a red-hot property market, while cooling measures were expected to limit home price growth going forward. FILE PHOTO: The Taoyuan Xindu Kongquecheng apartment compound developed by China Fortune Land Development is seen in Zhuozhou, Hebei province, China March 19, 2021. Picture taken March 19, 2021. REUTERS/Lusha Zhang/File Photo Average new home prices grew at their slowest pace since December on a monthly basis, and since January on an annual basis, as authorities stepped up property curbs this year, from capping banks’ lending to the sector to restricting purchases. The property market’s sharp rebound from the COVID-19 shock last year has raised concerns about financial risks, but the array of tightening measures are taking a toll on the property sector, a vital source of Chinese economic growth. China’s property market is also grappling with widespread problems at the country’s second-largest property developer China Evergrande Group, which is struggling to restructure a mountain of debt and avoid a possible default. Average new home prices in China’s 70 major cities grew 0.2% in the month of August after rising 0.3% in July, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS). China’s new home prices grew 4.2% in August from a year ago, versus a 4.6% increase in July. Authorities have stepped up measures to rein in China’s property market this year, including caps on banks’ lending to the sector, upper limits on developers’ debt ratios and restrictions on purchases. More than 20 cities strengthened their curbs on the sector in August. ADVERTISEMENT The measures have slowed property purchases while some developers are being hard hit by the liquidity squeeze. New home prices in low-tier cities rose more slowly than those in tier-one cities, but home prices in one of China’s biggest cities Guangzhou fell month-on-month for the first time since March 2020. “(The) property market has cooled significantly in the third quarter of this year,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution. “The continuous tightening of credit policies and the decline in transaction volume have led to a clear slowdown in price growth.” The NBS data showed 46 out of 70 cities reported month-on-month gains, down from 51 in July. Property investment grew 0.3% year-on-year in August --- its smallest growth in 18 months and down from a 1.4% increase in July, according to Reuters calculations based on separate NBS data. ADVERTISEMENT Nomura said in note that ongoing property curbs were unlikely to be eased in the near term, as Beijing has “attached national strategic importance to reining in property bubbles.” “Housing price growth is expected to slow down in the future,” said Zhang Dawei, chief analyst with property agency Centaline. “The number of cities seeing a slowdown in prices growth will increase.” Earlier this month, ratings agency Moody’s downgraded its outlook on China’s property sector to negative from stable due to tighter access to funding. In an effort to ease housing woes of young people, authorities have also increased the supply of affordable housing and moved to cap the cost of home rentals for the first time.