Chinese new home prices extended their declines in September but at a much slower pace, leaving analysts wondering if the market's losing streak is finally nearing an end.
Average new home prices fell 0.9 percent on-year, narrowing from August's 2.3 percent slide and July's 3.7 percent drop, marking the slowest decline in 13 months, according to Reuters calculations that are based on official data released Friday.
On a monthly basis, September prices ticked up 0.3 percent, the fifth straight month of gains.
Shanghai-listed property developers traded higher following the data, with Lvjing Real Estate and Vanke rallying 1 and 4 percent respectively.
A breakdown of Friday's data revealed that tier-1 cities continued to enjoy the highest gains, likely reflecting the government's efforts to loosen restrictions on property purchases in an attempt to stimulate the troubled market.
Shanghai prices spiked 8.3 percent on year, rising from August's 5.6 percent gain, while Beijing saw an increase of 4.7 percent from 3 percent previously.
Minimum down payments for second home buyers have already been cut three times this year, a move Moody's calls credit positive for property developers amid expectations for higher housing sales. Meanwhile, March saw the finance ministry exempt sellers from a transaction tax if they had owned the property for two years.
"We feel that the prices are still going up very strongly in tier one cities ... in the tier two, three and lower tier cities, there's the issue of oversupply coming in. And the oversupply will result in lower prices in order to clear the supply," Paul Tao, managing director at New Heritage Investments, told CNBC.
Dalian, Wuhan and Chongqing are among well-known second-tier cities, while Zhongshan and Dongguan are examples of third-tier areas.