Chinese households shunned the property market last quarter, with buying interest the lowest since the People's Bank of China quarterly surveys started in 1999, the central bank said yesterday.

Of 20,000 urban households surveyed in August, 13.3 percent said they intended to buy a house in the next three months, the central bank said on its Website.

Buying intentions in first-tier cities like Shanghai, Beijing, Tianjin and Guangzhou were even less than the national average, sitting at less than 10 percent, the central bank said.

Property prices in 70 major Chinese mainland cities recorded the first month-on-month decline in August since the country started compiling the gauge in July 2005.

The drop may herald further corrections of the property industry, analysts said.

The average property price in Beijing was unchanged in August from July, while Shanghai posted a 0.2-percent month-on-month decrease last month.

China's property sector has been plagued by sharp drops in transaction volumes this year after the central bank raised minimum down payment requirements and increased lending rates for speculators who hold more than one mortgage.

The survey found stocks and funds also lost their attraction among households.

Only 8.2 percent of respondents said stocks and funds were a good investment, down 8.6 percentage points on the previous quarter. The measure has recorded drops over four quarters with each tumble more than 8 percentage points.

The preference on stocks and funds hit a record high of 44.3 percent in the third quarter of 2007.

The benchmark Shanghai Composite Index has lost nearly one-third from its peak of 6,124.04 in October.

The survey found about 63 percent of respondents said they preferred to put their money into bank deposits, the central bank said.

Household savings rose to 340.4 billion yuan by the end of August, up 382.3 billion yuan year on year.

Meanwhile, only 24.5 percent of respondents said they expected their income to rise in the fourth quarter, declining for three straight quarters.

In a separate survey on businesses, entrepreneurs showed that overseas orders dropped to their lowest since July 2005 when China depegged the yuan from the United States dollar.

Businesses maintained high expectations of a further slowdown in the economy, the central bank survey on 500 companies said.

(Shanghai Daily September 23, 2008)