House prices in China fell for the eighth straight month in a row in May but the pace of decline eased, according to the latest figures from the National Bureau of Statistics.

It means that property prices in the world's second largest economy have fallen month on month since October.

But there are no plans to ease the market tightening measures that have been in place for two year now. Officials said that it would keep them in place amid concerns about inflation and the slowing economy.

Analysts said that the price falls are too small to persuade the government to reverse its cooling measures and that if it was to loosen restrictions now it may mean the economy is slowing faster than expected.

Housing prices are stabilising or approaching the bottom. But we still cannot see any signs of rebounding, said He Yifeng, an economist at Hongyuan Securities in Beijing.

Average new home prices fell 0.1% in May from a month earlier, narrowing from April's fall of 0.3% based on home price data in 70 cities published by the NBS. Only 40 cities saw new home prices fall in May from April, as compared with 43 in April, 46 in March and 52, the most so far, in December.

The year on year figures show that the average new home prices dropped 1.5% in May, the third straight month of decline compared with April's fall of 1.2%. A total of 54 cities saw a year on year fall in prices.

Worst hit was Wenzhou where they fell 14.2%. The eastern city has been seriously hit by private business failures in recent months due to external headwinds.

The People's Daily, the mouthpiece of China's ruling Communist Party, said in an analytical report that many home buyers worry about a rebound in property prices, as China has relaxed monetary policies, which changed market sentiment and boosted property sales since March.

It seems home prices and tightening policies have reached their bottom so quite a few home buyers are starting to panic again, it said.

An unnamed spokesman from the housing ministry was quoted as saying that all localities must firmly implement various property tightening measures as required by the central governmentђ.

But the weakening economy, likely to grow at its slowest pace in more than three years this quarter, is fuelling expectations that Beijing will probably have to relax property curbs if external headwinds worsen.

Reinforcing such expectations are local governments' steps to make it easier for first time buyers by relaxing policies marginally so as not to irritate Beijing while stimulating local housing transactions.

The semi official China Securities Journal reported on Monday that transactions of new and existing homes combined rose 46.5% in Beijing in the first half of June as compared with the same period last year, citing data from the local housing bureau website.

Vanke, China's largest developer by sales, said earlier this month it would take about 11 months to sell down unsold stocks in key cities such as Beijing, Shanghai and Shenzhen.

This article has been republished from Propertywire