Home prices rise in most cities

On Thursday, the National Bureau of Statistics said in a statement on its website that 68 out of 70 major Chinese cities saw home prices rise in March from a month earlier... up from 66 in February.

Bureau statistician Liu Jianwei said expectations of higher home costs after government control measures led to a sales surge in March...

Prompting property developers to cancel discounts... Or hike prices.

Liu also said March is traditionally a peak season for housing sales, adding heat to the market.

First-tier cities saw the largest monthly gains in new home prices, with Shanghai's 3.2-percent growth topping the list, followed by 2.8 percent in Shenzhen and 2.7 percent in Beijing.

The rising property prices across China come after the central government rolled out a plan in early March to tighten control over the housing market.

Under the new policy, homeowners who sell their houses or apartments face income tax as high as 20 percent of the profit they make on the sale.

And throughout the month, cities across the country announced their own rules... Detailing how they'll carry out the central government's plan.

Among them, Beijing and Shanghai, where apartments are in high demand, have set some of the toughest curbs.

Beijing ruled that single adults with a permanent Beijing residence registration or "hukou", are only allowed to buy one property...

While Shanghai said banks will be banned from giving loans to local residents buying a third property or more. <

Since then, buyers and sellers have rushed to real estate centers, to secure better deals before the tax went through at local levels.

Many lined up at midnight, fearing the heavy new tax, will cause prices to rise further... if sellers pass it on to buyers.

Among the measures -- the 20 percent capital gains tax levied on second-hand home transactions sparked panic among both buyers and sellers.

SOUNDBITE: FENG, Nanjing resident

"The buyer requested me to make the transaction as soon as possible. Once the new policy is put in place, it will be harder to sell my apartment. I will have to raise the price, as I need to pay a much higher income tax."

The new tax is a big jump from the previous rate of just 1 to 2 percent, of the final sale price.

And Feng says the higher income tax on home transactions would ultimately be covered by consumers.

SOUNDBITE: FENG, Nanjing resident

"I think the heavier tax will be paid by buyers in the end, as home sellers will raise prices to avoid losses. So this will add great pressure on those who really need to buy a home to live."

China's booming property market has led to more speculation by the rich, but also left many young people struggling to buy their first apartment.

Some experts say Beijing and Shanghai's new measures will help cool the real estate market, and bring prices down to a rational level.

Others say the limits won't last long, and that the government should do more to make homes more affordable, for those less well-off.