However, real estate investment remained buoyant, relieving concerns that tightening steps would inflict serious damage on the property sector and the broader economy.
Property prices rose 7.7% last month from a year earlier, down from October's 8.6% rise. The downward trend started in May.
Beijing first took aim at runaway property prices late last year. It brought more powerful ammunition into play this April, making it harder for people, particularly speculators, to buy multiple residential units, and it reinforced the campaign in September.
"The government measures are working, otherwise, property prices might have risen much faster," said Wang Xiao, an analyst with CCB International in Beijing.
Real estate investment in November rose 36.7% from a year earlier, edging down from October's growth of 37%, the National Bureau of Statistics said on Friday, Dec 10.
Developers will continue to pour money into building at a rapid pace regardless of expectations of further tightening steps, industry analysts said.
Liu Liyong, research head of the China Real Estate Information Corp, said property investment might slow next year, but would still maintain a heady pace of above 30%.
"Developers' cash flow will not tighten too much because banks are still willing to lend to them," he said. "Monetary tightening will not suffocate developers, but only make them a bit breathless."
Despite constant warnings from the banking regulator, Chinese lenders and trust companies are still channeling money to developers, as such loans offer handsome interest margins and they believe that real estate assets will remain safe, analysts added.
Seeing that, investors' concerns that tightening could cause a crash in the real estate market have abated.
The Chinese Academy of Social Sciences, a top government think tank, said on Wednesday that property prices would probably fall mildly in 2011 as authorities remain committed to squeezing speculators out of the market.
Wang with CCB International said that as developers expect further policy tightening early next year, probably after the gathering of the National People's Congress, the annual parliament in March, they would cut prices to boost sales.
Beijing still has various cards to play, including interest rate increases, a long-awaited property holding tax and tighter restrictions on the number of units each family can buy.
"Developers want to sell as much as they can now," Wang said. "We will see them cutting prices in the next several months, but not much, most likely by less than 15%," she said. — Reuters