House prices rise in December (2)

"The trend will continue this year, with cities that have a limited supply facing more pressure from price hikes."

Gu Yunchang, deputy head of the China Real Estate and Housing Research Association, agreed.

"Demand in those big cities with the home purchase restriction policies in place was much stronger than those third- and fourth-tier cities, and that's why we are seeing some property developers going back to first-tier cities again, after the fast expansion in lower tier cities over the past few years," Gu said on an online forum hosted by the property website, house.china.com.cn.

China's improved economic outlook, a worsening supply-demand relationship and the slowed release of new property, all fuelled market expectations of further price hikes, industry analysts said.

Most economists are forecasting a pick-up in China's GDP growth this year.

Qu Hongbin, HSBC's chief economist in China, said recent it is expecting modest growth of around 8.6 percent in 2013, despite ongoing external economic headwinds.

Property experts suggest that this growing economic demand will have a knock-on effect on the property market.

Zhang Ping, head of research at the international real estate service provider Cushman & Wakefield, said: "We see strong pent-up demand after a few years of constraint in the property market."

We recommend:
BJ-GZ HS to add 30b yuan to GDP annually	Great changes in Zhengzhou railway station	Wanda Group ventures onto the global stage
Sports car makers look to mainland market	Top Ten Economic Events in 2012	'Gold road' laid with gold bars