Home prices continue to moderate in September

China's home prices continued to moderate across more cities in September despite easing government restrictions on the market, official data showed on Friday.

New home prices in 69 of 70 sampled cities showed month-on-month drops in September, compared to 68 in August, the National Bureau of Statistics (NBS) said in a statement.

The only exception is the city of Xiamen, where home price remained flat from the previous month.

The latest data marked the fifth consecutive monthly drop, according to the NBS data.

New home prices in Beijing and Shanghai dropped by 0.9 percent and 1.1 percent, respectively. For existing homes, all 70 Chinese cities saw price drops in September, with the southwestern city of Nanning registering the sharpest fall of 2 percent.

On an annual basis, home prices in 58 out of the 70 cities were lower from a year ago.

"Although home prices in the majority of cities dropped on a monthly basis, the pace of decline has narrowed," said Liu Jianwei, a senior statistician at the NBS.

Friday's data was released alongside other statistics that showed slower growth in real estate investment and property sales.

China's property investment rose 12.5 percent year on year in the first nine months of 2014, 0.7 percentage point slower from the growth in the January-August period, while property sales went down by 8.9 percent year on year during the Jan.-Sept. period, with residential property slumping 10.8 percent.

The continuing downturn in the property market, a major growth engine for the world's second largest economy, dragged down growth in the broader economy, which slowed to 7.3 percent in the third quarter.

To avoid a sharp slowdown in the property market, China on Sept. 30 unveiled eased mortgage measures for home buyers in a joint announcement by the People's Bank of China, the central bank, and the China Banking Regulatory Commission.

According to the announcement, mortgages on second homes will be treated as a first mortgage if the buyer has no other outstanding mortgages.

Before the easing of mortgage rules, 41 out of an original 46 cities removed home purchase restrictions.

Shen Jianguang, chief economist at Mizuho Securities, said although the broader-than-expected support policies would help stimulate sales, China still faces a heavy pile-up of inventories.

"Given that, the property sector's negative impact on the broader growth will last for a while," he said.

Zhang Dawei, chief analyst at real estate agent Centaline Property, agreed. He expects this round of adjustment for the property sector to last until early 2015.