The residential price correction has spread to nearly half of mainland cities, a downturn that is expected to ease political pressure for more cooling measures.
National Bureau of Statistics data showed the average price of new private housing fell in 34 of the 70 major cities surveyed, compared with only 17 cities in September.
Home prices in 20 major cities remained unchanged. Only 16 cities recorded property price growth last month, compared with 24 cities a month ago.
The average price of new homes in first-tier cities including Beijing, Shanghai, Guangzhou and Shenzhen began to slide last month, with prices falling 0.1, 0.3, 0.2 and 0.1 per cent from September respectively.
In financially stricken Wenzhou, the average price dropped 4.9 per cent, the sharpest fall among all the mainland cities surveyed.
'The number of cities which registered month-on-month property price declines has broadened out pretty significantly in October,' said Lee Wee Liat, regional head of the property department at Samsung Securities. During the downturn of 2008, 50 out of 70 major cities recorded price declines after the government invoked a series of cooling measures.
In the secondary market, the price correction is also obvious. Last month, average prices of second-hand homes fell in 38 of the 70 major cities. Only 25 cities recorded price declines a month earlier.
Prices of secondhand flats in Shanghai and Guangzhou also began to fall last month. Lee said the property price decline had broadened, a sign the government's policy was having the desired effect.
'As such there is no need for more tightening,' he added. 'At the same time, I think the government should start to be cautious about property prices correcting on the downside as it will inevitably affect the economy,'
Lee suggested the policy should start to be more balanced, and officials should be prepared to limit the downside of a property price decline. Alan Chiang Sheung-lai, of property consultant DTZ, said most developers had cut the asking prices of their new projects to boost sales.
'Only small flats and flats with cheaper prices have received a better market response in the last few months as demand from end-users remains strong. Sales of luxury flats have stayed at low level.'
He believes the cooling measures in the property market will continue over the next few months, adding: 'I don't think the government will relax the measures in the short term.
'Our survey showed prices of new homes in first-tier cities dropped 5 to 8 per cent last month. We expect the prices will drop a further of 15 to 20 per cent in the next few months.'
The fall in the average price of new homes in financially-stricken Wenzhou last month - the biggest drop among the cities surveyed