A number of local governments with strong price rises took action.  The moves have already taken effect with transaction volumes down this month.

China Index Academy data shows that transactions in most cities fell in the first week of April, with Beijing and Shanghai falling by more than one third. Transactions in 28 cities monitored by the Academy dropped 23 percent on the month. Transactions in first-tier cities fell 27 percent, second tier cities were down 20 percent, and the third tier cities saw transactions fall 35 percent.

Among the big cities, Guangzhou declined nearly 38 percent, followed by Shenzhen's 31 percent and Beijing's 30 percent. Shanghai was down 17 percent.

Analysts say the transaction slide was a correction after property price increase reached a record high in March. Still, analysts expect Beijing's sales to keep climbing with a small rally in new home sales. However, transactions in pre-owned properties will continue to decline in the second half of this year. Meanwhile, property sales in Guangzhou could climb back as many analysts believe properties there are undervalued.