China home prices fall in March

"The measures came out at the end of March, which meant they contributed less to the narrowing declines, but they are expected to greatly improve April's and future property market performance, " said Xia Dan, chief researcher with Bank of Communications' Financial Research Center.

The NBS data showed that total investment in the real estate sector went up 8.5 percent to 1.67 trillion yuan in the first quarter this year, 1.9 percentage points slower than that in the first two months.

"Weakening investment remains a burden on China's economic growth," Xia said. "Loosening the connection between the property market and overall economic development is a crucial task."

He predicated the government will not lessen the purchase limit in first-tier cities like Beijing and Shanghai, where demand still surpasses supply.

Meanwhile, the picture in smaller cities is still grim, mainly due to high inventories resulting from years of rampant investment in real estate, which was extremely lucrative for local governments.

Zhang Dawei, chief analyst with property information provider Centaline, forecast that the sales volume will recover in the second and third quarter of the year.

Premier Li Keqiang said last month that he hoped to see "steady and sound development of the real estate market".

The 2015 government work report also said China will stabilize its property market, with tailored, market-based policies.

China's real estate sector began to see slumps in prices and sales volume last year, prompting authorities to loosen regulations previously put in place to rein in rocketing prices mainly fueled by speculative purchase.