China's?housing authority has launched investigations into excessive housing price rises in second- and third-tier cities.

Based on its findings, restrictions on house purchases, already in force in some major metropolitan areas, will be extended, according to a report in China Business Journal.

The Ministry of Housing and Urban-Rural Development is drafting a new list to include cities where home prices, as well as investment in real estate development, have been rising rapidly, the journal said.

Last Thursday, the State Council said that China would deepen tightening measures in cities where home prices remained extremely high to help fend off a speculative bubble.

Urging local governments to abide by efforts to cool the overheated property market and also meet targets for building affordable housing, Premier Wen Jiabao, who chaired the State Council meeting, said the real estate market was at a critical period as pressure on house prices in some cities remained strong and controls in some cities had been relaxed.

There has been growing concern among the country's decision makers that home prices have been rising very quickly in some of China's second- and third-tier cities over the past few months after investors flocked to those less affluent areas where people are still free to buy properties without restriction.

For instance, new home prices, excluding those built under the country's affordable housing programs, rose 0.6 percent monthly in Yichang of Hubei Province in May, the most across the country. It was followed by Shenyang in Liaoning Province, Changsha in Hunan Province, Urumqi in Xinjiang Uygur Autononous Region and Huizhou in Guangdong Province, which all gained 0.5 percent from a month earlier, according to data released by the National Bureau of Statistics.

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