Average new home prices in 70 Chinese cities declined for a second straight month in June and fell more sharply as property developers stepped up discounts to lure home buyers amid a housing market downturn.

Home prices slid 0.47% in June, compared with a 0.15% fall in May, according to calculations by The Wall Street Journal, based on data released Friday by the National Bureau of Statistics. May’s drop was the first month-over-month decline in two years. On an annual basis, the average price in June rose 4.05%, compared with 5.35% in May.

Excluding subsidized low-income housing, prices fell 0.48% in June from May, compared with a 0.16% decline in May. Home prices fell in 55 of the 70 cities in June, a broader range than the 35 cities that posted declines in May.

Real estate and construction are important drivers of the Chinese economy, accounting for more than 20% of growth in the world’s second-largest economy when cement, steel, furniture and other related industries are factored in, analysts estimate.

To arrest the slide, property developers—many of them holding large inventories of unsold units and facing tight credit—have been offering discounts, though some analysts expect prospective buyers to wait for lower prices.

“The price cuts have only just started, and now that the discounts are getting bigger, I would think it’s better for homebuyers, if they can wait, to hold off purchasing a home now,” said Song Huiyong, research director of Shanghai Centaline Property, a real-estate consultancy. “The price cuts could last for as long as a year this time, since there is little prospect for a broad-based stimulus.”

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