Land authorities have already started to cut land supplies in an effort to adjust the housing market, lowering land supply from 172,600 hectares planned at the beginning of this year to 159,300 hectares, according to a research note from Sinolink Securities.

Like Xue, it added that a property tax may be introduced if prices continued to climb.

In a separate research note, China Index Academy said it was unlikely for the central government to introduce any extreme policies.

A salesman talks with potential homebuyers at a real estate fair in Qingdao, Shandong province. With the government making an effort to rein in the once-overheated property market, growth in investment in real estate development in the country slowed down in the first seven months of the year. [Photo/China Daily]

Amid what it called a "complicated macroeconomic situation", decision-makers were unlikely to introduce policies that may "counter the efforts of maintaining growth", it said.

The Economic Observer, a weekly newspaper, said local governments will be keeping a close watch on any changes to land transfer fees. Such fees have contributed large proportions of their fiscal income in the past two years. But many local governments have already reported declining fiscal revenues in recent months due to shrinking fees from land sales.

Although the inspection teams’ evaluations have not been fully completed, some warnings and alerts are believed to have been issued already to local government officials in Hunan, Hubei and Hebei provinces and in the city of Jiangmen, in Guangdong province, the source suggested.

Wang Juelin, deputy director of the Policy Research Center with the Ministry of Housing and Urban-Rural Development, China’s real estate watchdog, said that July’s nationwide checks were a lot more thorough than just checking on current implementation of policies.

He said that any warnings given to those not implementing the policies strictly as required, will result in reports being made to decision-makers to keep a close eye on their systems in the second half of the year.

He added that policy curbs on the property market must be strengthened.

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