While May became China's ninth month in a row to record deflating property prices, the rate of decline was slower, according to new data.

The fall in China's home prices was less steep in May than April, in a sign its property downturn could be slowing.

On a year-on-year basis, new home prices fell for the ninth consecutive month, dropping 5.7 per cent. This was a positive change from the 6.1 per cent decline in April, according to Reuters' calculations based on official data from China's National Bureau of Statistics.

In Shanghai, prices dipped 2.3 per cent from last May, almost half the 4.7 per cent year-on-year fall in March. In Beijing, prices were also down 2.3 per cent year-on-year, compared to -3.2 per cent in April.

Looking at the figures on a monthly basis, of China's 70 major cities, 41 recorded falling prices last month, compared to 47 in April.

China's slowdown is not yet over though, according to Kevin Gardiner, global investment strategist for Rothschild’s wealth management business.

“China’s capital markets are still largely closed – if its currency is voted into the IMF’s special drawing rights (SDR) basket this November, another staging post in the slow process of opening them up will have been reached – and it makes no net contribution to aggregate demand in the rest of the world,” said Gardiner.

“And as trend growth slows, the Chinese government still has a sufficiently tight grip on the economy – and plenty of room for manouevre – for it to be able to avert a more painful hard landing for now at least.”

BofA Merrill Lynch's recent global fund manager survey reignited “bubble trouble” talks with 70 per cent of investors saying China’s equity market is in a “bubble” and half expecting the Chinese economy to weaken further.