China’s new home prices fell for the eighth consecutive month in April from a year earlier but were flat from March, adding to hopes that a property downturn which is weighing heavily on the economy is beginning to bottom out.

However, analysts warned that any recovery in the market will take some time, given a huge inventory of unsold homes and a slump in real estate investment growth to the lowest levels since the global financial crisis.

Average new home prices in China’s 70 major cities dropped 6.1 per cent last month from a year ago, the same rate of decline as in March, Reuters calculated from official data published on Monday.

But prices were flat from March, further narrowing from a 0.1 per cent fall in the previous month. “The data are signalling an obvious bottoming out,” said Gavekal Dragonomics economist Rosealea Yao in Beijing, adding the secondary market was leading with a 1.1 per cent annualised monthly rebound. “But it won’t be a strong rebound for sales and construction due to still high inventory levels.”

Following a relaxation of tax rules and easier downpayment requirements on second homes in late March, the central bank earlier this month cut interest rates for the third time in six months to lower companies’ borrowing costs and re-energise the sputtering economy.

Home sales measured by floor area rebounded 7.7 per cent in April from a year ago, the first growth since November 2013. But real estate investment growth continued to slow in the first four months of 2015 to the lowest since May 2009 as new construction slumped, impacting demand for everything from steel and cement to appliances and furniture.

Economists say the property sector remains the biggest risk to Beijing’s growth target of around 7 per cent this year and authorities will need to take bolder stimulus measures.

The sector accounts for some 15 per cent of China’s economic output. The National Bureau of Statistics data showed new home prices in Beijing rose 0.7 per cent in April from March, improving from a 0.3 per cent rise in March from February, while Shanghai prices were up 0.6 per cent after being flat in the previous month.

Liu Jianwei, senior statistician at the National Bureau of Statistics (NBS), said in a statement on Monday that prices are still polarised between first and lower-tier cities, with an average 1 percent monthly rise in the first-tier and 0.1 percent fall and 0.3 per cent fall in the second and third-tier, respectively. Third and fourth-tier cities account for around 60 per cent of national sales. Of the 70 major cities the NBS monitors, 48 posted a monthly decline, down from March’s 50.

Reuters