Policy makers called for more flexibility and legislation in managing the real-estate market at the China Development Forum over the weekend in Beijing. 

Chen Changsheng, deputy director general of the Department of Macroeconomic Research, suggested that local governments in third- and fourth-tier cities should be granted more power on property management.

"Now there are land supply shortages in first-tier cities, but capital and people are gathering there, while there are plenty of land supplies in the third-‍ and fourth-tier cities where people and capital are fleeing. So we should carry out policies according to the realities in different cities," Chen said.

It was mentioned in the Report on the Work of the Government 2016 that differentiated regulatory approaches – policies to curb rising prices will be carried out in some major cities, while those to encourage house buying will be applied in third- and fourth-tier cities that have huge inventories of unsold housing.

Wang Wei, director general of the Institute for Market Economy, said that complete systems and laws are necessary. "The government should build property transaction system and home financing system, and also establish laws, such as rental laws, as there are only a few laws for property market in China."

Home prices in China's cities continue to rise amid growing demand and despite government efforts to slow the climb. 

Official data for February show the average rise in home prices in 70 major cities accelerated, ending four months of easing. New home prices rose by 0.3 percent for the month, quicker than January's 0.2 percent. 

China's four largest cities, Beijing, Shanghai, Shenzhen and Guangzhou, allow local families to have two residential properties at maximum. The down payment for second home purchases was recently raised to 70 percent in Shenzhen and Guangzhou, 60 percent in Beijing, and 50 percent in Shanghai.

Since 2014, the authorities have launched rounds of property market regulations, but the prices in major big cities have repeatedly rebounded shortly after every tightened regulation round waved in. According to Beijing Youth Daily, the authorities should focus more on checking the rising land prices and increasing the land supply to stabilize home prices in the long run, instead of pushing on with temporary home purchase restrictions alone.