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Beijing is stepping up curbs on property market speculation after prices surged in one area of the capital, raising concerns some bigger cities may also tighten home purchase rules.
China's year-long slump in the housing market has dragged on the economy but there are fears bubbles are forming in some big cities even as prices in smaller cities languish.
Analysts say other cities, however, are not expected to follow Tongzhou district, a southeastern suburb of the capital, as prices in that area had been fuelled by expectations it would become a sub-administrative center for local government.
Under the new rule, non-residents of Tongzhou and those who have not paid social insurance or taxes there for at least three years, are barred from buying second homes in the area, the Beijing municipal commission of housing and urban-rural development said in statement on its website late last Friday.
For people without Beijing housing registration, they must have paid more than five-years worth of taxes or social insurance with three-years of that registered in Tongzhou to buy the first home in Tongzhou, it said, adding that previous restrictions would stay in place.
Previously, buyers were not required to have paid three-years of taxes in Tongzhou or be registered as residents in Tongzhou, to buy homes in the area.
Analysts say market conditions remain weak in smaller cities.
"We do not see this as a signal that the favourable policy stance will reverse in the short term, especially in the lower-tier cities," property analysts at Barclays said in a note.
The capital city's property controls are always more stringent than other cities as residents there are barred from owning more than two homes while non-residents who have paid more than five-year's worth of taxes can buy no more than one property in the city.
Chinese cities relaxed home purchase restrictions last year to support slow economic growth with only four first-tier cities keeping the rules unchanged.
While home sales and prices have improved in bigger cities in recent months after a barrage of government support measures, a huge overhang of unsold houses in small cities still keeps the housing market under pressure.
July property price data for 70 of the biggest Chinese cities is due on Tuesday and analysts expect prices to have risen further from the previous month on improved sales and market sentiment.
