China's plans to stabilise its booming property market face a stiff challenge after home prices surged to fresh record highs in October, with the measures likely to take a few years to have their desired impact.
Home prices in large Chinese cities have continued to set records despite a four-year long government campaign to cool the market.
This adds to the threat of a price bubble and social unrest as housing becomes increasingly unaffordable.
Responding to these concerns, the leadership pledged to push forward property tax legislation and allow farmers to sell their land more freely as part of its boldest set of economic and social reforms in nearly three decades.
Analysts said timing is the key. While the measures in the reform plan are aimed at long-term stability for the property market, any delay in the implementation could be problematic.
Average new home prices in China's 70 major cities in October rose a record 9.6% from a year earlier, according to Reuters calculations from National Bureau of Statistics data today.
It was the tenth month of year-on-year increases in a row.
The latest data showed prices in the largest cities continued to charge ahead. Prices in the capital Beijing rose 16.4% in October from a year ago, with Shanghai up 17.8% and the southern cities of Guangzhou and Shenzhen up about 20%.
All four cities posted the largest gains since the data series began in January 2011.
Beijing, Shanghai and Shenzhen have already announced a number of tightening measures, including raising minimum down payments for second-home buyers, making more land available and pushing forward the construction of affordable housing.
Such measures seem to be having some effect, with home prices rising 0.6% from the previous month in October nationwide, easing from September's gains of 0.7%. Month-on-month gains had topped 1% as recently as April.
Policy makers are keen not to bring the market to a sudden halt as property is a major driver of the economy, supporting some 40 other industries and generating about 16% of the country's $8.5 trillion GDP.
Property prices have climbed despite slower economic growth and government efforts to curb them in large part because of the view that property is one of the best investment options, and also due to local government land sales for much-needed revenues.
