Major policies related to realty were adjusted as many as 92 times in September, the highest frequency in a single month since October 2022, according to the China Index Academy.

This helped buoy an otherwise low market where the four benchmark cities registered just a 0.4 percent year-on-year growth in October in new home prices, with smaller cities showing a varied trend.

"Nevertheless, factoring in the sluggish demand in low-tier cities and tepid sales from January to August, we anticipate that the recent easing of restrictions will underpin real estate sales throughout the year, but is unlikely to drive a strong market rally nationwide," the S&P Global report stated.

Yao Yao, head of research for global real estate advisor JLL China, said it will take some more time for the gradual release of homebuying demand, and the stabilization and rebound of transaction volume will come afterward.

"Considering the relatively limited relaxation measures in first-tier cities, there are quite a few potential homebuyers who anticipate stronger policies. As consumers tend to be more active when prices are rising rather than when prices trend down, they will wait out the downward curve in most Chinese cities," Yao said.

James Macdonald, head and senior director of Savills China research, said he believed the policy measures are not necessarily designed to encourage residential sales growth, but to stabilize market conditions and shape a pickup in transaction volumes. The lack of a broader rebound despite strong government measures might be due to a lag in policy impact, lingering market uncertainty and concerns among potential homebuyers about the economic outlook.

"In the current market environment, boosting both market and homebuyers' confidence is crucial, which requires several conditions and measures, such as maintaining a stable macroeconomic environment, ensuring transparent policy communication and implementation, promoting sustainable development in the real estate market, offering financial support to homebuyers, and enhancing market regulation to mitigate risks and fluctuations," Macdonald said.

Xie Chen, head of research with CBRE China, a commercial real estate services and investment firm, said individual property developers' debt crisis has affected new home sales as homebuyers are concerned about the delivery of projects that are still under development, while the weak economic recovery has also crimped the release of home purchase demand.