However, in a statement after the data was released the Chinese statistics bureau said that home sales are expected to show a significant rebound in March, according to Reuters.
"The news isn't great, and it hasn't been great for some time. The credit crunch in China is very real and prices do have to adjust after a very long time," John Saunder, head of APAC at Blackrock Real Estate told CNBC.
"I think the China government is trying to make moves to stabilize things. They've undergone a lot of policies and obviously the [central bank] is now reducing the policy rates, so that will all help. but you can't turn it around instantly," he said.
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The People's Bank of China slashed the reserve requirements of major banks - or the minimum amount of cash banks need to hold back from lending - in January. The move follows the central bank's surprise interest rate cut in November.
After skyrocketing in recent years, China's property prices have been cooling amid a glut of supply and as economic growth moderated.
The housing sector contributes to about 15 percent of China's economy. The world's second-biggest economy slowed to 7.4 percent in 2014, the slowest rate in 24 years.
"We remain of the view that the property market will have to switch to boosting the economy from being a drag in order to hit the 7 percent [gross domestic product] growth target this year," ING said in a note.
"We also think this will require further monetary accommodation and we remain of the view that the [People's Bank of China] will deliver another 25 basis points of policy interest rate cuts in each of the last three quarters of the year. We expect increased financial policy accommodation to work, meaning most tier 1 cities reporting year-over-year increases in new home prices (currently zero). We think the more buoyant property market go far in halting outflows of confidence-sensitive capital," ING added.
- Reuters contributed to this report