Property sales by floor area fell 3.6 percent year-on-year in the January-February period, compared with a 1.3 percent gain in 2018, official data showed.
Weakening price gains point to strains on China's massive property sector and raise questions over whether more cities will risk loosening restrictions on home buyers.
China's economic growth is slowing down.
The ministry said while it will curb speculation in the property market, in efforts to maintain continuity and stability of housing policies it will also support "reasonable" housing demand that's non-speculative.
Nationwide growth in China's property prices has moderated this year in response to measures to curb speculation. But many investors are still exploiting regulatory loopholes, turning to smaller and less restrictive cities.
The property market - a key driver of economic growth - has been cooling in recent months, as land auctions tumbled and various tightening measures kept overall home sales in check.
Soon-to-be-published research will show roughly 22 percent of China’s urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study.
A cooling market could sharply increase the downside risks to the world's second-largest economy, which faces broader headwinds including an intensifying trade war with the United States.
But the government's initiative has had an unintended effect: a surge of property investors into the rental market that has dramatically pushed up prices
Real estate has been one of the few bright spots on China's investment front, partly due to robust sales in smaller cities where government efforts to tame hot property prices were less stringent
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