China's home prices dipped for the eighth straight month in May but the pace of decline eased, fanning talk that the market may be bottoming out and that recent monetary stimulus could set the stage for a rebound.

Home prices in the world's second-largest economy have fallen month-on-month since October, after China tightened policy more than two years ago to take the steam out of sizzling home prices.

Still, Beijing reaffirmed hours after the data it would keep property tightening measures in place, concerned that inflationary pressures are still a problem even as the broader economy slows.

Prices have declined but the cumulative drop is still mild, analysts say, keeping home prices near record highs and out of reach for the majority of China's burgeoning middle class.

If Beijing moves to loosen restrictions now, it may mean the economy is slowing faster than expected.

Average new home prices fell 0.1 per cent in May from a month earlier, narrowing from April's fall of 0.3 percent, according to Reuters calculations based on home price data in 70 cities published by the National Bureau of Statistics.

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 set of year-on-year data told a different story, showing the average new home prices dropped 1.5 per cent in May. That marked the third straight month of decline, and compared with April's fall of 1.2 per cent and March's dip of 0.7 per cent.

A total of 54 cities suffered year-on-year home price declines in May, by as deep as 14.2 per cent in Wenzhou, an eastern city seriously hit by private business failures in recent months due to external headwinds.

After the housing data, Chinese property shares reversed earlier losses, while Chinese developers listed in Hong Kong jumped.

Reuters