Expectations of more favorable monetary policies, including two cuts in banks' reserve requirement ratio in the past three months, are creating isolated pockets of optimism, though analysts said Beijing would be quick to put a damper on any signs of a price rebound.

WSJ: China Housing Prices Fall Again

In addition, the People's Bank of China cut its reserve requirement ratio for large banks for the first time since December 2008, following a modest easing for small rural banks last month.

WSJ: Central Banks Propel Asia Markets

Resource shares supported the Sydney market, and the Australian dollar jumped briefly, after China's Xinhua news agency said the People's Bank of China would boost liquidity via its reserve requirement ratio.

WSJ: Asia Markets End Mixed