The Central Government is "sparing no efforts" to prevent housing prices from increasing too rapidly.

On January 10, the State Council issued a notice "promoting the stable and healthy development of the real estate market," intending to guide the "rational housing consumption," and restrain speculative apartment and house purchases. The government also pledged to restrict land stockpiling and frequent land transactions between developers, according to a press conference held January 13.

But the question is: who is responsible for the property price surge? While many blamed developers for their greediness and applauded the government's determination to crack down on the bubbling real estate market, few took into full consideration the government's actual role.

Selling land has become one of the major sources of income for many local governments. The land use right transfer fee accounted for almost 50 percent of Beijing's and Shanghai 's fiscal revenue, according to E-House (China) Holdings Ltd., a real estate services company. Competition among developers for land is intensifying, since whoever makes a larger offer at land auctions gets the land. Land transfer fees in 2009 stood at 1.5 trillion yuan ($220 billion), double those of 2008, according to figures from the China Index Academy, a real estate research institute.

Analysts agree the increasing fees are a risky signal, as land has not only become a major source of government income but also a source for the government's investment in public welfare. Many guess the government will not allow property prices to fall too much.

But any bubble will take time to burst. In 2009, the problems concerning property use for commercial purposes began to emerge. On January 11, about 20 property owners protested at the gate of SOHO's latest project—the Nexus Center--accusing the property developer of failing to lease the office space as it had promised.

SOHO projects used to be best sellers in the Beijing market, but became more of a burden than a benefit in 2009.

"Affected by the financial crisis, commercial properties contracted, arousing conflict between buyers and property developers," said Wang Qiong, a property analyst at Savills China—a real estate service provider.