Iron ore has taken a beating this year, with prices correcting over 30 percent from their year-to-date high of $135 a tonne in January, but one analyst told CNBC this presents the perfect buying opportunity.

"It is time to tactically get long iron ore swaps and Fortescue Metals," Conor O'Malley of independent research firm View from the Peak said in a note.

While a weakening real estate market in China, which accounts for around two-thirds of global iron ore purchases, coupled with a flood of ore supply suggests further gloom for the market, O'Malley said this shouldn't put investors off.

"Accepting all of the above, it is still time to buy iron ore exposure as we move into the Chinese winter," he said.

Among factors that underlie iron ore's vicious decline this year are reports that commodities like iron ore and copper are being used as collateral for financing deals in China, raising concerns that a crackdown by authorities would dampen demand.

But View from the Peak's O'Malley is confident that the market's dynamics will turnaround soon: "A 30 percent correction in any commodity market will produce a supply reaction. Iron ore is no different," he said.

He pointed out that weak prices forced a number of Chinese iron ore miners offline, resulting in tighter domestic supply. This should put upward pressure on prices especially as the market heads into the harsh Northern winter which normally reduces supply, he said.

O'Malley said iron ore prices potentially have another $8 per tonne to fall, but noted upside potential of $17 from current levels, making the risk-ratio compelling.

Other analysts agreed that the price of iron ore shows signs of stabilizing around current levels of $93 per tonne.

"I actually feel that we are at a reasonable area. It's at one of those points where it's not cheap and it's not expensive," said Jonathan Barratt, chief investment officer at Sydney-based wealth management firm Ayers Alliance.

"About two months ago I would have said we could have gone a lot lower, but now because we've held these levels I'm more optimistic that she should be quite stable," he added.

Barratt pointed to some other positive factors: the recent drawdown in inventories in China - which suggests appetite for buying could become stronger - and the fading of the panic over the issue of commodities being used as collateral.

"It's been like a lot of the issues that we've seen come out of China where it becomes an issue and they look after it... and as time has passed it looks like that issue has been taken care of," he added.

David Lennox, market strategist at Fat Prophets, told CNBC he sees iron pries rallying to $100 per tonne by year-end, driven by Chinese demand as they continue to switch from lower quality/high-cost domestic iron ore to high quality/low-cost product from the likes of Rio Tinto and BHP Billiton.

"Imports into China should continue to keep quality iron ore in tight supply over the remainder of 2014 and 2015," he said.

In July, China's iron or imports rose 11 percent on month as buyers took advantage of lower prices. Australian miners likely stand to benefit most; Australia's share of Chinese iron ore imports was 61 percent of the total in June and 56 percent in the first half of the year compared with an average of 51 percent in 2013.

"We believe downside is limited but the risk is that China switches off the import tap and then there could be some real downside risk," he added.