As the government has taken a range of restraining measures on the property sector since 2003, supply in the market has been gradually dropping. Yet excess liquidity remains and other investment channels are still limited, encouraging investment-oriented property purchases and adding upward pressure on prices, said Gu Yunchang, deputy director of China Real Estate and Building Research Institution.

"The striking feature about the property sector is that its supply elasticity is quite low, but its demand elasticity is high," Gu explained. "The sales of newly built properties exceeding the existing ones implies a further restrained relationship between supply and demand."

Gu's viewpoint is echoed by Pan Shiyi, who also believes demand outstripping supply remains the key trigger for this round of property price hikes.

"It usually takes property developers 18 to 20 months to turn land into sellable houses, so the government's restraining measures on land supplies in the past two years partly led to the shrinking supply of finished housing this year," Pan said.

According to Tian Yuan, vice-president of Guangzhou-based Hongyu Group, Beijing, Shenzhen and Shanghai shared two features - very little land available in urban areas and strong purchasing power of immigrants.

The recently fluctuating stock market has also encouraged some investors to turn their sights back to the property sector, a comparatively stable investment channel.

"We've noticed the phenomenon among some of our clients," said Tian.