China's urban property prices rose 5.8 percent in May from a year ago, accelerating 0.2 percentage point over the April growth rate, the National Development and Reform Commission reported yesterday.

Residents in Nanjing, capital of East China's Nanjing Province, walk past a newly-constructed apartment building May 10, 2005. [newsphoto]

The monthly survey tracks the prices of residential and commercial properties in 70 large and medium-sized cities.

Prices for new housing increased 6.1 percent last month from a year earlier, led by growth in Dalian, Shenzhen and Hohhot. Only Shanghai and Jinzhou in Liaoning Province reported a decline.

Shanghai new home prices fell 6.2 percent from the same month last year and Jinzhou dropped 0.8 percent.

Second-hand housing prices across China rose 6.7 percent in May from a year earlier, faster than the 5.8 percent rise in April. Dalian, Shenzhen and Zhengzhou reported the biggest climbs.

Commercial property prices rose 4.4 percent last month compared with the year before.

Gu Yunchang, vice president of the China Real Estate Housing Research Association, said growth will slow down in coming months in reaction to the government's latest string of regulatory measures designed to cool the market.

On May 29, authorities announced an increase in down payments for larger apartments and extended the period during which a property sales tax applies.

The new policy also restricts lending to developers and levies high penalties and even land confiscations for projects that aren't completed within their contract periods.

The new measures haven't deterred expansion by everyone, however. Shenzhen-based Vanke Co, the nation's largest listed developer, said last week it will kick off 20 new projects in the Yangtze River Delta Area and add 10 million square meters to its land bank this year.

The company also recently started sales of a villa-like apartment project in Shanghai's Minhang District.

"The new measures will deal a heavy blow to small industry players but may be good news for well-funded large developers," said Lina Wong, east China managing director of Colliers International, a real estate services firm.

CapitaLand Ltd, Southeast Asia's biggest developer, said on May 30 that it will enter Chengdu, Sichuan Province, for the first time to build five to seven projects in the near future. It also acquired a 60,000 square meter residential plot in Hangzhou for US$70 million last month.