BEIJING, CHINA - UPWARD pressure on China's property prices will only increase in the April-to-June period, following an 11 per cent annual rise in the first quarter, the top economic planning agency said in a report published.

The National Development and Reform Commission (NDRC) said on Wednesday that the recent weakness in the country's stock markets, coupled with rapid rises in consumer prices that are eating into real deposit rates, would only encourage more people to invest in real estate.

'This will give new impetus for property prices to increase,' the agency said in a report, summarised in the official China Securities Journal.

The NDRC did not give any forecasts for property price rises in the second quarter, but it said that increases in the price of steel and the cost of labour would hit housing prices in small- and medium-sized cities especially hard.

It recommended further steps to increase support for government rental housing, as well as to ensure that there is adequate land available for affordable, commercially built housing.

The government should also strictly implement restrictions on obtaining mortgages on second homes, it said. -- REUTERS