China's property prices increased by 0.5 percent in September from the previous month.

That's the first month-on-month rise since May, and underscores the necessity for further government curbs to discourage speculative home purchases.

Prices in China's 70 major cities rose 9.1 percent year-on-year in September, the National Bureau of Statistics (NBS) said on Friday.

On a monthly basis, prices rebounded for the first time since May after staying unchanged in the previous two months and declining in June.

"Those statistics indicate that the launch of new tightening policies was necessary to curb a rebound in property price," said Qin Xiaomei, chief researcher of Jones Lang LaSalle Beijing.

The central government released new measures to curb rising real estate prices on Sept 30. They included further raising down payments for home purchases and expanding property tax trials nationwide. Meanwhile, eleven local governments have so far launched detailed regulations to restrict the number of apartments a family can purchase in the city.

But for Lin Lei, marketing chief of Century 21st, a real estate brokerage which has its headquarters in the United

States, the property price is actually stabilizing when the growth in CPI is taken into consideration, and despite the month-on-month increase in Sept.

"Five months after the government launched the tightening real estate policies in April, transaction volumes began to pick up as prices dipped in first-tier cities. We are expecting the same situation to apply in second and third-tier cities in the fourth quarter," Lin said.

Property sales by volume rose 8.2 percent in the first nine months of the year to 632 million square meters, according to the statistics agency.

The value of sales jumped 15.9 percent to 3.19 trillion yuan ($480 billion). Property sales by volume jumped 16.6 percent in September from a year earlier, while sales by value rose 35 percent during the month.

"We expect property prices to stabilize in the fourth quarter, but an obvious drop is unlikely due to continuing robust demand," said Qin.

Nomura Holdings Inc predicts in a note that average residential prices may fall as much as 10 percent by the end of next year as cities such as Shanghai follow up with their own curbs.

Growing property investment and initial construction rates imply that supply is catching up. That's expected to ease price growth pressure next year.

According to the NBS, investment in real-estate development rose 35 percent to 515.6 billion yuan in Sept from a year earlier. That compares with a gain of 34.1 percent in August. For the first nine months, investment jumped 36.4 percent from the same period in 2009. figures for initial construction jumped 44.3 percent in Sept, compared with a 63.1 percent increase in the first three quarters.

Though the government is mulling over levying a property tax across the country, the market impact would be limited, according to Matt Brailsford, deputy managing director of Savills Property Services (Beijing) Co Ltd.

"I don't think property tax will be a huge consideration for most people, unless it is high like in the US and Germany," said Brailsford. "Meanwhile, the news has been factored in after months of reporting."

Besides, the levy of property tax mainly targeted speculators, but they had already been restricted by previous tightening policies, so the impact should not be huge, he said.

"However, there could be some fluctuation in the capital market once the tax is launched," added Brailsford.