"Even with these macro control measures, house prices in Beijing will still endure a growing momentum in the future, given the strong demand," said Peter Zhang, a senior manager with DTZ. "But the growth rate may slow down."

Statistics show that eight cities saw new residential housing prices fall in June from the previous month. Shanghai had the largest drop  5.4 per cent down from house prices in May.

"This shows that the real estate bubble in Shanghai has been squeezed a little," said Wang from DTZ.

The price of a second-hand property increased on average by 4.9 per cent year-on-year in June, 0.6 of a percentage point higher than the previous month.

And that for non-residential properties, such as offices and warehouses, in the 70 cities rose 5.3 per cent on a yearly basis.

Meanwhile, a report from DTZ shows that the flow of overseas capital into China is accelerating, with commercial properties a major target.

DTZ statistics show that foreign investment in the property market reached US$4.5 billion in the first quarter of 2006, exceeding the figure for the whole of last year  US$3.5 billion.

Although sources said new rules to control foreign investment in China's property market have been agreed and will soon be released, it is unlikely to stop the flow of overseas capital, analysts predicted.

"These measures will make highly speculative investors think twice, but will not affect long-term investors who are confident in China's economic prospects," said Nicholas Cho, director of DTZ's investment department.

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