New home sales in 16 Chinese cities picked up last week, reflecting an improvement in consumer sentiment due to government support policies and the easing of COVID-19 restrictions, China Index Academy said on Monday.

New home sales measured by floor area in 16 Chinese cities including Beijing and Shenzhen rose 4.9% for December 4-10 compared with the week before, up from a 0.1% gain the previous week, the research firm said.

The academy said favourable policies from regulators, adjustments in local property policies and relaxations in COVID related curbs are helping sentiment slowly recover, but more policies are still needed to lift confidence.

"The optimization of the epidemic prevention and control measures will improve the market confidence to some extent and can also promote people to check the houses they want to buy or visit the market, which will contribute to a rise in housing transaction volume," said the academy's analyst Chen Wenjing.

The weekly growth of the 16 selected cities was dwarfed by a rise of 45.4% in tier-three cities last week.

The area of new housing transactions in Beijing, Guangzhou, Shenzhen and Wuhan all increased week-on-week for December 4-10.

China has in recent weeks stepped up support for the industry to loosen a liquidity squeeze that has stifled the sector, including lifting a ban on fundraising via equity offerings for listed property companies.

The property sector also be benefited from China's pivot away from three years of strict zero-COVID policies last week, but sluggish demand is still a major constraint of a full recovery. (Reporting by Liangping Gao and Ryan Woo; Editing by Lincoln Feast.)