New home prices fell at the fastest pace in 10 months in August, down 0.3% month-on-month after a 0.2% decline in July, according to Reuters calculations based on National Bureau of Statistics (NBS) data. Prices were down 0.1% from a year earlier, after a 0.1% decline in July.

For August, property investment fell for the 18th straight month, down 19.1% year-on-year from a 17.8% slump the previous month, separate data showed on Friday. Home sales are down for the 26th consecutive month, according to Reuters calculations based on the data.

China has in recent weeks delivered a raft of measures to boost home buying sentiment, including easing some borrowing rules, and relaxing home purchasing curbs in some cities.

These policies have given major cities like Beijing a tiny boost in new home sales, but some worry they might be short-lived and could potentially dry up demand in smaller cities.

China's broader economy is showing signs of stabilisation with economic figures showing quickening growth in industrial output and retail sales.

However, analysts say a series of supportive policies have yet to firm up the crisis-hit property sector with major Chinese developers still fighting to avoid default.

"We are still hopeful that housing sales would stage small sequential pickups in the coming months, but stimulus will ultimately stop short of reflating the sector," said Louise Loo, China economist at Oxford Economics.

China's central bank said on Thursday it would cut the amount of cash banks must hold as reserves, its second such easing this year.

"The more material risks in the near-term come from some property developers and financial institutions, and a small RRR cut could do very little to help," said Nomura in a research note on Friday.

Around 30 cities eased home purchase curbs and relaxed mortgage rules for buyers in recent weeks but analysts say Beijing may have to introduce more aggressive property easing measures to deliver a real recovery.

Authorities may also need to lift almost all restrictions on home transactions, invest more in the urban renovation programme, speed up infrastructure spending and restructure local government debt, said Nomura.

Moody's on Thursday cut China's property sector outlook to negative from stable, citing economic growth challenges, which the rating's agency said will dampen sales despite government support.

China's property crisis is seen as one of the biggest stumbling blocks to a sustainable economic recovery, with rising risks of default among private developers threatening to imperil the country's financial and economic stability.