BEIJING, Oct. 31 -- China's decision to relax mortgage lending rules a month ago has helped market sentiment and sales, but pressure in the property sector remains due to excess inventory.

Data from the China Index Academy revealed that, from Oct. 19 to Oct. 25, residential property sales in most of the 21 monitored first- and second-tier cities rose, with sales growth in Beijing and Shenzhen hitting 17.78 percent and 36.13 percent, respectively, compared with last month.

In the second-hand housing sales market, fallout from the eased mortgage measures was even more obvious. Statistics from Homelink, China's largest chain real estate broker, showed that transactions in Beijing from Oct. 1 to Oct. 26 doubled compared with last month.

The U.S. rating agency Moody's predicted in its China Property Focus Newsletter that nationwide residential sales in China will improve in the fourth quarter of 2014 following supportive policies.

The year-over-year decline in total contracted sales for China's residential property market will slow to 5 to 10 percent for the full year of 2014 compared with a drop of 10.8 percent for the first nine months of 2014, Moody's estimated.

"With easier mortgage availability, at least 30 percent more home buyers will jump into the property market because upgraders, who are shopping for better properties, are able to enjoy the same mortgage benefits as first-time buyers," said Zhang Dawei, chief analyst at Centaline Property.

China on Sept. 30 unveiled eased mortgage measures for home buyers in a joint announcement by the People's Bank of China, the central bank, and the China Banking Regulatory Commission.

According to the announcement, mortgages on second homes will be treated as a first mortgage if the buyer has no other outstanding mortgages.

They will also be allowed interest rates as low as 70 percent of the 6.55-percent benchmark mortgage rate, instead of paying a 10-percent premium on top of the benchmark rate as required previously.

Within one month after the mortgage easing measures, 13 out of the 16 listed banks offered better terms for mortgages, and 11 of them, including Bank of China, provided 5- to 10-percent discounts on mortgage interest rates to first-time homebuyers, according to Rong360.com, a financial information provider.

Among the 23 cities monitored, Rong360 found that 18 had seen declines in average mortgage interest rates for first-time home buyers. Nanjing, Xiamen, Foshan, Chongqing and Shenzhen saw the biggest declines.

Although the easing policies have partially alleviated the downside pressure on property sales and lowered the cost of mortgages for borrowers, in the long run, the pressure for the housing sector will remain given the extra inventory.

"China still faces a heavy pile-up of inventory and the recent sales increase will not alter the current situation," said Zhang Hongwei, chief analyst of Tospur Real Estate Consulting.

The housing inventory in 35 Chinese cities hit a 5-year high for a total of 280.13 million square meters by the end of September, up 23.8 percent year on year, according to data released by property consultancy E-House China.

Statistics showed that the housing inventory in 31 out of 35 cities posted a year-on-year increase during the period, with Nanchang, Wenzhou and Jiujiang witnessing the sharpest increases of 99.3 percent, 60.3 percent and 60.1 percent year on year, respectively.

In addition, Moody's predicted that residential home prices in China will remain under pressure over the next few months because developers will continue to offer price incentives on new projects for sale in 4Q 2014.

In September 2014, the number of cities that recorded year-over-year price declines jumped significantly to 58, up from 19 in August and three in July. Out of 70 major cities, 69 reported month-on-month price declines in September 2014, up from 68 in August 2014, according to Moody's.

"This round of adjustment for the property sector will last throughout the year and till early 2015," Zhang added.