The once-bullish property market is tapering off, as government measures to cool the market take effect.

In August, 24 out of 70 monitored major cities reported month-on-month increases in prices of new commercial residences, down from 39 in July, said the National Bureau of Statistics. Meanwhile, 16 cities experienced price declines, compared with 14 in the previous month. Prices stood unchanged in 30 cities.

As for second-hand homes, prices rose in 27 cities in August, decreasing from 36 cities in July. Also, 26 cities saw their prices head lower, an increase of four cities from July.

Policymakers have tried all levers to let air out of the real estate bubble. The government will expand purchase restrictions to second- and third-tier cities where prices are skyrocketing.

The price restrictions will intensify financial pressures on property developers and help drag prices down. But the measure may face local opposition as local governments rely on land transfer fees as a source of revenue, said Gu Yunchang, Vice President of the China Real Estate Association.

Chen Sheng, Vice President of the China Index Academy, said both developers and home buyers took a wait-and-see attitude in the past two months, but it is clear that the government's clampdown will continue or become even tougher in the future.

The People's Bank of China recently conducted a survey of over 20,000 urban residents in 50 cities, and 75.6 percent of respondents said the current house prices remain too high, 1.3 percentage points higher than three months ago.

Nigel Chalk, China mission chief at the IMF, believes the restrictions on speculators only treated the symptoms, not the causes, of the malaise.

"Ultimately, the solution has to involve higher interest rates, efforts to create a broader set of financial assets for the population to invest in, and a broad-based property tax that covers the majority of China's housing stock," he said.