China property market
A Chinese national flag flutters at a construction site for a new residence complex in BeijingReuters

China's house price index fell to a 15-month low in June leading to hopes authorities will step in with more property boosting measures and helping Chinese stocks buck the Asian trend of falling shares.

The rate of house price growth fell to 4.2% in June, its lowest since March 2013. The index has been on a declining trend since coming in at a high of 9.9% in December last year.

China Vanke, a major property firm in China, was 3.25% higher at 8.89 yuans at 7:30 GMT while the Shanghai Composite index was trading 0.17% higher.

The real estate sector sub-index rallied more than 2% helping China's main share index buck the regional trend of lower shares following the shoot down of the Malaysian plane MH17 in Ukraine on Thursday.

Analysts said that the government is targeting 7.5% of GDP growth, which it managed to record in the second quarter only with the support of targeted measures in sectors like real estate suggests they will be forced to step in to arrest the free fall in housing prices.

Chinese Premier Li Keqiang said on Thursday that economic growth of slightly more or less than 7.5% this year would be acceptable as long it still led to new jobs and higher wages, the official Xinhua news agency reported, suggesting the government is unlikely to bear with a sharper drop of growth below the 7.5% mark.

Chinese economy grew 7.5% in the three months to June on a year-on-year basis, the National Bureau of Statistics said on 16 July. Analysts had been expecting a growth of 7.4%, unchanged from Q1.

China had increased spending in railways, cut taxes and reduced banks' reserve requirements in order to increase credit availability for some sectors, and the Q2 data shows that the measures have been productive.

The Chinese yuan strengthened to 6.2016 against the dollar on Friday from the previous close of 6.2038.

China house price index
China house price index at 15-month lowIB Times UK/BM