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China's biggest banks have been told it's their job to pull the nation's collapsing property market back from the brink.

Marching orders for the Industrial and Commercial Bank of China (IDCBF), China Construction Bank (CICHF) and other lenders were announced by the central bank Tuesday a few hours after the release of dismal market data for April.

New home sales by floor space fell 6.9% and by revenue declined 7.8% to 1.83 trillion yuan in April compared to the same month 2013, the National Bureau of Statistics reported. Those figures followed first quarter 2014 declines of 3.8% by floor space and 5.2% by revenue.

The People's Bank of China Web site said its Deputy Governor Liu Shiyu had discussed housing issues and speeding up mortgage approvals with executives from 15 commercial banks and the Big Five state-owned banks - ICBC, Construction, Bank of China, Agricultural Bank of China and Bank of Communications (BCMXY).

Bankers were told to "give priority" and "improve efficiency and give timely approvals" to mortgage applicants.

"It's a reasonable allocation of credit resources to give priority to... families for obtaining their own, regular commercial housing loans," the central bank Web site said.

Banks in some parts of the country, notably in cities and provinces near Shanghai, have reportedly been slowing or even freezing mortgage loans in the face of rapidly declining prices. Some developers have defaulted on construction loans and abandoned unfinished apartment complexes.

In separate reports, analysts with Nomura and Societe Generale left no doubt that the real estate tailspin is threatening the Chinese economy. Nomura warned the slowdown could push the year-end GDP growth rate down to 6% and wildly miss the government's 7.5% target.

Both reports cited an oversupply of new housing as a key concern. Nomura said new home floor space has grown an average 13.6% annually since 2000 and "this trend looks set to continue in 2014," even though China's urban population is only growing 3.7% annually.

Nomura also raised questions about possible data-fudging aimed at hiding the extent of the housing oversupply. "Official inventory levels may understate the true scale of inventory accumulation, as real estate developers and local governments may be reluctant to publicize huge stocks in the local data."

In Societe Generale's report, Hong Kong-based analyst Wei Yao wrote that "many Chinese cities are already suffering from oversupply issues.

"Although further urbanization will continue to support demand growth," she wrote, "the pace of urban population growth in the next decade will still slow, and there is a big affordability gap for rural migrants."

Yao suggested the government and its banks consider "measured and targeted credit easing" which "might avoid a nationwide crash. But some overly stretched cities -- in terms of over-supply and leverage -- will still experience severe pain."

This article was republished with permission from TheStreet.