China home prices post first annual drop in 2 years

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Hong Wu | Getty Images

China new home prices fell 1.3 percent in September from the year-ago period, marking the first annual drop in almost two years, according to Reuters calculations from official data released on Friday.

On a month-on-month basis, prices fell one percent, their fifth straight month of drops and wiping out gains in the past year. However, the extent of the decline eased slightly from the 1.1 percent fall in August.

China's property markets have slowed down dramatically after a solid showing in 2013, sparking fears of a hard landing for the world's second-largest economy.

The housing sector is linked to some 40 sectors in the country from cement to furniture, and estimated to contribute more than 15 percent to gross domestic product.