Second quarter real estate crash unlikely

The continuation of policies aimed at cooling China's housing market is not likely to cause a crash in the second quarter of this year, according to the China Land Index.

"According to our yearly monitoring, housing prices tend to soar in the second quarter every year," said Sun Yinghui, director of the Land and Mineral Resources Legal Affairs Center, which released the index on Tuesday.

A part of the Ministry of Land and Resources, the center has produced the China Land Index since 2009. It reflects the nation's current real estate market and guides policy decisions.

Sun said government bodies need to be aware that property investment is moving from large cities to smaller ones due to falling house prices and strict supervision by authorities.

The index showed that the amount of land used for infrastructure increased dramatically in the first three months of this year, while the residential land supply decreased.

According to a report issued by the China Land Surveying and Planning Institute in April, urban residential land prices recorded their first quarterly slump this year since the second quarter of 2009.

The average residential price was 4,516 yuan ($720) per square meter in the first three months, about a 0.04 percent decrease from the fourth quarter in 2011, according to the report.

Zou Xiaoyun, deputy chief engineer of the institute, said the property prices are still currently overvalued.