Chinese homebuyers look at models of residential apartment buildings during a real estate fair in Shanghai, Dec 13, 2014. [Photo/IC]

Home prices in China rose for a fifth consecutive month in September, suggesting a mild recovery in the housing market that will relieve some pressure on the country's economy.

Average new home prices inched up 0.3 percent in September from August, according to Reuters calculations based on data released by the National Statistics Bureau (NBS) on Friday, the same pace as in August.

Month-on-month price gains were recorded in 39 of the 70 cities surveyed, up from 35 in August.

The sector, which accounts for 15 percent of GDP, has become a rare bright spot in an economy that is expected to grow at its slowest pace in 25 years this year.

However, while home prices and sales have improved in recent months after a barrage of government support measures, conditions remain weak in smaller cities and a huge overhang of unsold houses is discouraging new investment and construction.

Data on Monday showed that growth in China's property investment in the first nine months of the year slowed to the lowest level since early 2009, while new construction in the same period continued to see a year-on-year drop.

Still, there are signs that property investment might be bottoming out, with new construction rising 15.3 percent in September from the same period a year ago, the first such growth in nearly a year, according to Reuters calculations based on official data.

Economists at ING said such a revival could point the way for property to become an economic growth driver again next year, boosting demand from construction materials from cement to steel.

But single-month data, derived from cumulative figures, can be volatile.

Indeed, prices for rebar, a steel product used in construction, slumped to record lows in Shanghai this week, while September cement output was down 2.5 percent from a year earlier.

Ma Jun, the chief economist at the People's Bank of China (PBOC), conceded that the weak property investment was the main source of downward pressure weighing on the economy but said he expected investment to improve in coming months.

"Rising home prices in recent months have steadied market sentiment... and the improved sales are likely to stabilize the property investment in coming months," Ma told the official Financial News on Friday. The paper is published by the central bank.

Major Chinese construction machinery maker Zoomlion Heavy Industry Co said last week it expects to report a loss in the third quarter due to the weakness in the yuan and a supply glut at home.

Caterpillar Inc, the world's largest construction and mining machine company, also reported weakness in its Chinese business on Thursday as it forecast a drop in 2016 sales and profit.

"It is going to grow, we have to be there," Caterpillar's Chief Financial Officer Brad Halverson said of China. "But China is soft and we don't see any big recovery in it next year."

A breakdown of NBS data also pointed to deteriorating property markets in smaller cities where a glut of unsold houses suppressed prices.

First-tier cities fared better, with Shenzhen being the top performer.

Prices in Shenzhen were up 37.6 percent in September from a year earlier, compared with a 31.3 percent rise the previous month.

Shanghai prices rose 8.3 percent, quickening from August.