Under the joint ownership structure, the government buys homes in conjunction with families using part of the proceeds from land sales, and it owns a partial stake in the house. When the house is sold, the government takes part of the proceeds in proportion to its ownership.

Only selected houses are eligible, and they're sold at a discount to market prices.

"Jointly owned homes will contain home price increases ... and help change Beijing's model of macro controls on the housing market," said Zhao Baogen, an analyst with Uwin Real Estate Research Center.

In May, the average home price in 100 major cities sampled by the China Index Academy Ltd, a Beijing-based research institute, dipped 0.32 percent month-on-month, the biggest drop since June 2012, to 10,978 per square meter.

The average price in 10 key cities, including Beijing and Shanghai, was 19,605 yuan per sq m, down 0.18 percent month-on-month but up almost 14 percent year-on-year, the academy said.

UBS AG's China economist Wang Tao wrote in a May 27 research note that unlike previous property downturns in China, this one had no obvious policy trigger and instead was a result of shifting supply-demand fundamentals.

"The pace of adding new housing has exceeded that of underlying demand, and an increasing share of property supply has been absorbed by investment demand," she wrote.

Construction of jointly owned housing projects will further increase supply, which could deepen the current downturn.

In Beijing, for example, 50,000 units of joint ownership housing is expected to hit the market this year. That would be equivalent to more than half of the 80,566 units of new home sales last year.

Top 10 most expensive properties in Beijing	Top 10 regions with highest GDP in China