A visitor checks out a property project at a Pearl River Delta realty fair in Guangzhou. MAO SIQIAN / XINHUA

The weeklong, fortnight and 28-day reverse repurchase rates have risen 10 basis points to 2.35 percent, 2.5 percent and 2.65 percent, according to data from the central bank.

Tightened lending has excluded some potential homebuyers from the residential property market in some cities, denting the already declining transaction volume.

The combined transaction volume of residential properties in 30 major cities dropped 36.7 percent month-on-month in January by space volume.

Shanghai and Shenzhen lost the most with a more than 60 percent month-on-month plunge, and Beijing followed with a 50 percent decline. Second-tier cities also lost 42 percent month-on-month in terms of transaction volume, the research note said.

Most major cities will continue to see lower transaction volumes in 2017, particularly those cities with fast growth of average prices in the past two years, said a research note from real estate services provider JLL.

"The heat is cooling and investors are becoming rational. Data in January and early February have signaled the basic tone of the residential market in 2017, with more calmness and stability," said Zhang Dawei, chief analyst with Centaline Property.

Lower-tier cities have benefitted from the spillover effects of a cooled market in major cities, as potential buyers are likely to shift to smaller cities with more relaxed policies over homebuyers' qualification, down payment requirements, and more affordable prices and favorable loan rates.

"An increasing number of residents are considering buying properties in lower-tier cities, particularly in their hometowns or key cities near their hometowns instead of in first-tier cities," said Ma Weiqi, sales manager with Yuhongda Real Estate Ltd in Hefei, Anhui province.