The report pointed out that through a combination of restrictive policies and long-term mechanisms, house prices in most cities have stabilized. Ni Pengfei, director of the Center for Cities and Competitiveness at the Chinese Academy of Social Sciences, said the increase in the average residential sales price has been maintained at a level below 4 percent since 2017. Under the role of severe regulation, real estate in general showed a steady rise, the first and second tier cities growth rate differentiated downward, the third and fourth tier cities differentiated upward.

In marked contrast to the narrowing trend of first- and second-tier increases, home prices in third- and fourth-tier cities led the nation. Data from the National Bureau of Statistics showed that in September 2017, the price of newly built commercial residential housing in third-tier cities among 70 large and medium-sized cities rose 7.4% year-on-year, much higher than the 0.5% in first-tier cities and 5.6% in second-tier cities.

Taking the single month of October as an example, the Big Data House Price Index (year-on-year) showed that in October 2017, among the 74 sample cities, eight cities, Foshan, Jinan, Chengdu, Hangzhou, Qingdao, Guangzhou, Xi'an and Changsha, saw their house prices rise by more than 40 percent compared with the same period last year. In seven cities - Chongqing, Wuxi, Huizhou, Wuhan, Dongguan, Xiamen and Yantai - home prices rose between 20% and 40% year-on-year. Meanwhile, Beijing, Tianjin, Hefei and Shanghai saw cumulative declines of 14.53 percent, 9.8 percent, 2.14 percent and 0.17 percent, respectively.

Specifically, the house price-to-income ratio in first-tier cities remains high. Data show that although the national average house price-to-income ratio is only 7.5, the overall house price-to-income ratio is stable, but from the first-tier cities individually, its house price-to-income ratio is still as high as 31.3, of which, Beijing house price-to-income ratio is as high as 41, ranking first among all cities.

The current decline in house price growth in some of the first and second tier cities is the result of administrative restrictive measures under the heavy hand of regulation, not really by the market supply and demand mechanism, price mechanism, the competition mechanism to play the role of self-regulation of the changes. Therefore, if the late supply in the first and second tier cities is difficult to keep up, land, finance and taxation and other institutional policies have not been established under the background of the regulatory relaxation, the previous inhibition of the effectiveness of the rapid rise in housing prices will be a loss of effort, the demand for restrictive measures or waiting for the opportunity to rekindle, so that the first and second tier of the hotspot city housing prices to appear retaliatory growth.