The mainland's cooling measures have failed to curb home prices, which rose last month for the 12th consecutive month on the back of ample liquidity in the market.
The price of new homes in 100 cities rose 0.81 per cent from April to 10,180 yuan (HK$12,900) per square metre, 6.9 per cent higher than a year earlier, according to the China Index Academy.
The academy, run by the property website operator SouFun, said 77 out of 100 cities surveyed posted a month-on-month rise, while prices dropped in 22 cities and stayed flat in one.
Prices in the 10 biggest cities reached 17,202 yuan per square metre, growing 1.05 per cent from April. Guangzhou posted the largest gain, of 2.52 per cent, followed by Chengdu, with 2.1 per cent. Prices in Beijing, Shenzhen and Nanjing rose 1 to 2 per cent.
Zhang Hongwei, head of research at the Shanghai-based property consultancy Tospur, said the rise in home prices last month was partly driven by an influx of hot money after central banks around the world adopted quantitative easing policies.
The government's cooling measures, such as the 20 per cent capital gains tax on second-hand properties, had not been strictly implemented, Zhang said.
He said he expected home prices to continue to rise as the mainland's central bank might cut interest rates or banks' reserve requirement ratios in the second quarter if economic data indicated a sluggish recovery.
"The monetary easing is likely to cause capital inflows into the property market and continue to boost prices," he said.
Rising land prices would also support increases in home prices, he said. "The financial condition of leading property developers is strong. They are therefore more active in acquiring land."