Premier Wen Jiabao reaffirmed the need for government measures to restrain the mainland's property market yesterday.
He spoke amid expectations that back-to-back interest rate cuts could signal a policy shift.
On a visit to Changzhou, Jiangsu province, he said the government would not relax its two-year-old campaign to curb speculation and bring down prices in what was widely seen as an overheated property market.
'It is a crucial time for the controls over the property market,' Wen said, according to Xinhua. 'The controls have to be continued. And it will be long-term policy to curb speculation in the property market.'
Anticipation of a policy change intensified on Thursday, after the People's Bank of China announced its second rate cut in a month. It lowered the one-year lending rate by 0.31 per cent to 6 per cent, and the one-year deposit rate by a quarter of a percentage point to 3 per cent.
Property shares rose as investors saw a change in property policy as increasingly likely.
Shares in Shenzhen-listed China Vanke rose 3.88 per cent to 9.65 yuan (HK$11.84) on Friday, while China Overseas Land and Investment shares rose 4.83 per cent to HK$19.12.