House prices in 70 large and medium-sized cities grew 9.3 percent in August year on year, down from 10.3 percent in July. This was the fourth consecutive month of slowdown as policymakers vowed to let air out of the real estate bubbles.

The austerity measures included curbing bank credit to property developers, limiting loans for third-home purchases and higher down-payment requirements for second-home purchases.

Home sales topped 353.3 billion yuan ($51.96 billion), down 8.6 percent year on year. But compared to July, the number represented a robust growth of 15.2 percent.

Property developers are also retracing their strength. The China Vanke Co. Ltd., for example, experienced a dizzying 149-percent increase in sales revenues in August from one year ago while the Poly Real Estate Group Co. Ltd. said its August sales almost doubled year on year.

The market remains sluggish, but the pent-up demands vented in August, as evidenced by a rebound in transactions, said Xue Jianxiong, an analyst at the China Real Estate Information Corp.

Chen Guoqiang, Director of the Real Estate Research Institute of Peking University, said it is still too early to predict a substantial turnaround, given uncertainties hanging over the market.

Once the market rally spins out of control, the government will likely enact an even heavier clampdown over the sector, he said.