Heavy tax to dampen speculation(3)

"We see continuing risks in China's property market and believe the country's newly elected leadership will be proactive in implementing existing policies to control the property market and seek to introduce new cooling measures if upside risks intensify in certain cities or regions," said Shen Lan, an economist at Standard Chartered Bank

But the government may tolerate a pickup in the sector as long as price increases remain in line with underlying fundamentals, according to Shen. "That said, continuing policy pressure should ensure that any upward pressure on home prices is kept in check," she added.

Meanwhile, the government will also put more land on the market to boost the supply, according to the statement.

Property developers, fueled by improved cash flow, are still quite optimistic about the market and are strengthening their competition for more land parcels.

In Beijing, a total of 13 land parcels valued at 10.7 billion yuan ($1.7 billion) were sold on Thursday, with the premium price dropping compared with the end of 2012, industry statistics showed.

There were 33 real estate enterprises competing for the 13 land parcels, and the highest price premium was 50 percent, lower than the record 400 percent premium recorded at the end of 2012.

According to Zhang Dawei, head of Centaline's research department, as the government has launched more land parcels in the market, the competition was not as fierce compared with the end of the year, effectively curbing the price increase.