New home prices in most cities across China were lower on a year-on-year basis last month, and home prices in key cities are stable, according to National Bureau of Statistics, which released monthly housing market data on Monday.

Liu Jianwei, a senior statistician at the NBS, said that new home prices in most of 70 monitored cities in November were lower than in 2016. Second and third-tier cities witnessed slight growth in new home prices. New home prices in first-tier cities and in third-tier cities slowed in November.

"City-specific measures are taking effects continuously," said Liu.

Among the 15 key cities, housing markets are stable and growing steadily. On a month-on-month basis, seven cities experienced new home price declines, at levels between 0.1 percentage points and 0.3 percentage points. New home prices in Beijing, Shanghai, Zhengzhou and Wuhan remained at the same level as in October.

On a year-on-year basis, 11 cities experienced new home price declines of between 0.2 and 0.3 percentage points, showing that the average home price level is now lower than that of 2016.

About 50 out of the 70 cities reported higher new home prices in November or unchanged prices from October, showing the broad strength in markets across China.

Transactions in new homes in mega cities like Shanghai and Beijing are not as active as last year because the supply side is no longer growing after more land supplies are being allocated to residential rental projects, said Jenny Wu, East China senior director and head of residential of Cushman & Wakefield, a real estate services provider.

As policymakers have repeatedly stated that housing is for housing, not for speculation, real estate development is likely returning to fundamentals such as demographic changes, migration and housing studies, which encourage developers to rethink real demand, said Wu.

Research from Nomura said that despite short-term pressure in some cities, China has long-term property demand.

"Potential demand exists and we expect income levels to continue to increase steadily. Assuming that property prices stabilize in the next three to five years, affordability should improve and potential demand should turn into actual demand, although the short-term factors, such as liquidity conditions and restrictions on property transactions, will drive property sales and investment growth to moderate in the near future," the note said.