A swift rebound in property prices, however, is unlikely due to high inventories in all but the biggest cities, forcing developers to slow the pace of or even stop expansion to protect their cash flows.

"For next year, most market players are somewhat pessimistic as new construction is still dropping and policy effects are fading away," said Liu Yuan, head of research at property consultant Centaline in Shanghai.

Average new home prices rose 0.1 percent in October from a year earlier, Reuters calculated from National Statistics Bureau(NBS) data out on Wednesday, reversing September's 0.9 percent drop, marking the first year-on-year gains since August 2014.

Even a modest recovery in a sector that accounts for 15 percent of gross domestic product is a welcome boost for an economy heading for its weakest growth in 25 years.

The numbers bootsted Chinese real estate stocks with the Shanghai stock exchange property subindex <.SSEP> surging more than 4 percent. Greenland Holdings and Poly Real Estate gained nearly 10 percent.

The NBS data showed larger cities have led the price upturn, with Shenzhen the top performer. Prices in Shenzhen rose 39.9 percent in October from a year earlier, quickening from September's annual 37.6 percent.

"Looking ahead, property prices will continue to warm up in first and second-tier cities. Smaller cities will face headwinds due to inventory destocking," economists at ANZ said.

MORE SUPPORT MOVES?

Following a year-long slump, China's home sales and prices have increased in bigger cities over recent months, helped by a barrage of government measures. Analysts expected to see more measures to revive the key sector in coming months.

Chinese President Xi Jinping told the APEC conference in Manila on Wedneday that the fundamentals of China's economy remain positive, the economy is proving resilient to the pains of deepening reform, and there is ample room to fend off downward pressure.

Data out last week showed growth in property investment cooled to its slowest rate since the global financial crisis, while new construction continued to show year-on-year falls.

"There are signs of price gains losing momentum, fuelling hopes that more stimulus, including tax breaks and downpayment cuts, will come in the remainder of this year," said Guo Yi, market director of Yahao, a real estate consulting agency.

Demonstrating that loss of momentum, month-on-month price gains were recorded in only 27 of the 70 cities tracked by the NBS, down from 39 in September.

Compared to a month earlier, home prices in October rose 0.2 percent, dipping from September's gains of 0.3 percent, according to Reuters calculations based on NBS data.

(Reporting by Xiaoyi Shao and Sue-Lin Wong; Additional reporting by Jenny Su; Editing by Eric Meijer)

By Xiaoyi Shao and Sue-Lin Wong