Beijing/Hong Kong: China is likely to hold off on any fresh moves to cool its property market for the next few months amid signs that earlier measures have had some success in curbing price rises.

Premier Wen Jiabao and other officials stuck to verbal suasion at a meeting this week of the National People's Congress, the largely ceremonial parliament, rather than unveiling new policies aimed at clamping down on property speculation.

Believing that Beijing has opted to hold off on new curbs for now, investors drove property stocks in Shanghai .SSEP to a one-and-a-half month high on Tuesday.

"The market takes it as an excuse for short-term rebound that there are no fresh policies," Toni Ho, an analyst at BOCOM International in Hong Kong, said in a note on Tuesday.

The Shanghai property index ended up 2.3 per cent after hitting its highest level since January 22, beating the main index's .SSEC 0.5 per cent gain. Shares of heavyweight developer China Vanke rose 2.4 per cent.

Royal Bank of Scotland said it saw further gains for mid-cap real estate stocks such as Shimao Property and Guangzhou R&F.

Investors heaved a sigh of relief after Su Ning, a deputy central bank governor, told reporters this week: "There is no need to issue new policies."

Adding on Su's positive remarks, Jiang Weixin, Minister of Housing and Urban-Rural Development, told a news briefing on Monday that the government has succeeded in controlling property speculation in some cities where prices were rising too fast.

In recent months, Beijing has tightened rules governing mortgage down payments and hoarding by developers of land and finished apartments, but policymakers have been careful not to act too quickly or aggressively.

Some analysts say Chin-ese officials welcomed a "manageable bubble" in the property sector and were actually more worried about the potential for a price collapse, which could derail the country's robust economic recovery and stoke civil unrest.

Property investments constitute about 10 per cent of Chian's gross doemstic product.

Tao Wang, a UBS economist in Beijing, said in a note on Tuesday that Beijing's efforts to build cheaper, more affordable housing and an expected increase in market supply later this year could bring down home prices.

"We expect overall construction to remain strong, but not necessarily prices," Wang said.

Initial result

The government has many tools at hand, including raising mortgage rates, lifting cash requirements of developers for projects and imposing special property taxes, if prices do get out of hand.

Some cities including Beijing, Shanghai and Nanjing recently rolled out detailed rules, including limits on the number of properties any foreigners can buy.

Lenders, including Bank of China and China Construction Bank, have also tightened loans to mortgage borrowers and developers after a sixth of the 9.6 trillion yuan (Dh5.14 trillion) new loans they extended in 2009 ended up with the property industry.

The National Development and Reform Commission said last month that property prices in 36 major cities gained 2.04 per cent in January from a month earlier, down from December's rise of 8.73 per cent.

The National Bureau of Statistics will announce property data for the first two months later this week.

The China Real Estate Index Academy, a private data tracking institute, reported last Friday a 36.6 per cent decline in residential property transactions in Beijing in February from January.

Volumes fell even more in other cities including Shanghai, Tianjin and Shenzhen, it said.

Wen repeated measures to curb speculative purchases and build more affordable housing in 2010 in a speech last week.