China vowed Friday to maintain tight controls over the country's property market after house sales recently picked up despite a slowing economy.
China has since 2010 introduced a spate of measures to control housing prices, including bans on buying second homes, hiking minimum down-payments and mortgage rates and imposing property taxes in certain areas.
Expectations for a loosening of controls on the sector to boost economic growth rose after the world's second-largest economy recorded its slowest expansion in more than three years in the second quarter.
But official data released this week showed home prices in more Chinese cities rose in June than in the previous month, as recent interest rate cuts encouraged buying and stoked expectations of a rebound in prices.
On Friday, the government said the curbs remained at a "critical" stage with increasing uncertainties in the market.
"Land and resources and house construction authorities at all levels must be clear-headed about that, keep controls on the property market tight... and resolutely prevent housing prices from rebounding," the Ministry of Land and Resources said in a statement.
Local authorities must also revoke any loosening they have already imposed, it added.
The news hit Chinese shares, which closed down 0.74 percent Friday on extended losses in property developers.
The Shanghai Composite Index, which covers both A and B shares, lost 16.20 points to 2,168.64 on turnover of 54.5 billion yuan ($8.6 billion).
The central bank this month took the rare step of slashing interest rates for the second time since early June, after cutting the amount of money banks must keep in reserve, aimed at stimulating lending, three times since December.
Chinese leaders have vowed to take further measures, and Premier Wen Jiabao last week called stabilising economic growth the government's "top priority".
However, the government said the effects of the restrictions on the real estate market were still to be "consolidated".
It asked local authorities to closely watch land auctions and make sure prices do not set new highs to prevent "disruption to market expectations and stability", according to the statement.