The State Council’s property inspection team criticized several provinces for not “strictly” implementing property control policies, although measures in most cities “more or less” meet Beijing's requirement, the Shanghai Securities News said, citing a source close to the surveillance team.

China may set new property controls as early as this month after the central government’s inspection team returns to Beijing and the government has some room to impose new curbs if necessary, including raising the transaction tax on existing homes and expanding a property tax trial, the source said.

The policies will be based on inspection results and likely come out this month as the government may want to avoid the traditional property sales season in September and October, the China Securities Journal reported.

The State Council appointed 8 groups to monitor the property industry over the past two weeks, as local governments have been reported going against central government's property restriction policies under the pressure of decrease in land transferring fees.

Just one day before this decision, media reported that Nanjing municipal government has launced an incentive policy to spur home sales.

Of the 16 provinces visited by the panel, three - Hunan, Hubei and Hebei - were asked to promptly impose "corrective measures" as local home prices look likely to rebound.

Premier Wen Jiabao has said the government will remain steadfast on the property controls it began introducing in April 2010 to ensure housing remains affordable.

While data from the China Index Academy showed that average home prices in 100 cities edged up 0.33 percent in July month on month, the government is unlikely to scrap policies within the next two years, as China’s home purchase restrictions are part of a long-term plan to control the property market, Shanghai Securities News said, citing Wang Juelin, a researcher at the Ministry of Housing and Urban-Rural Development.

China's economy expanded 7.6 percent year on year in the second quarter, slowing from 8.1 percent in the first quarter. The growth marked the sixth consecutive quarter of decline, indicating increased pressure for the government to stabilize economic growth, the Xinhua News Agency reported.

However, curbs on the property market will not be loosened for the purpose of stimulating growth, said Liu Xiaoguang, general manager of the Beijing Capital Group.