Home prices in China fell for the third straight month in July as developers reduced property prices to boost a weak demand.

According to the data released by the National Bureau of Statistics, home prices decreased in 64 of the 70 analyzed cities and the pace of decline was twice as that of June's. This was also the highest price fall since June 2011.

House prices in Beijing fell one percent on a month-on-month basis, while they were down 1.2 percent and 1.3 percent in Shanghai and Guangzhou, respectively. The largest price dip of 2.4 percent was recorded in Hangzhou and Sanya each, Bloomberg reports.

Experts say that this trend of falling home prices is expected to continue as lending is still tight and demand for properties is also weak.

"We expect home prices will continue to drop in coming months due to increasingly pessimistic market sentiment," Yan Yuejin, a property analyst at real estate services firm E-House China in Shanghai, told Reuters.

"The possibility of further moves by the central bank to loosen monetary measures could not be ruled out. That will put a floor on the downside of prices," Yuejin added.

Indeed, the value of home sales in the world's second largest economy dropped 10.5 percent over the last seven months - a steep year-on-year decline, The Wall Street Journal reports. Developers have been slashing property prices, but in vain. Lack of sales has piled up supply, while demand for properties is still choppy.

According to industry players, people are waiting for prices to fall further before starting to invest again. But, they also added that this trend of declining home prices is good for the economy and expect sales to pick up in the coming few months.

"What we've seen over the last 12 to 18 months, are policies aimed at clamping down the property bubble and those policies have actually worked. We've seen in the last 6 months, property prices coming down month on month, property sales volumes down about 8-10 percent and now we see property curbs rolling back," Peter Churchouse, author and publisher of the Asia Hard Assets Report, told CNBC.

"The rolling back is creating slightly easier policy settings [which] will accelerate sales in the second half and accelerate earnings," he added.