Home prices in 70 large and medium-sized Chinese cities rose by 12.4 percent year on year in May, said the National Bureau of Statistics. It was only 0.4 percentage points lower than the record high growth rate in April.

In its latest attempt to force speculators out of the property market, the Chinese Government has ordered banks to analyze the mortgage and home purchase records of people applying for second mortgages.

It's the first time China has included home ownership records in determining second home mortgages.

Previously, banks only defined homes based on mortgage records—so if a buyer already purchased two homes but only turned to the bank once for a loan, application for a third home would be deemed a second-home mortgage.

Under the new rule, such an application would be defined as a third-home mortgage and would be much harder to get.

The new measure means speculative buyers can no longer bypass higher interest rates or down payment requirements when seeking housing loans.

On April 15, the State Council announced tougher policies on second home purchases, with the down payment ratio rising from 40 percent to 50 percent and mortgage rates 1.1 times the benchmark lending rate.

The new rule also stipulated that out-of-town home owners who haven't paid income tax or social security funds in the previous 12 months in places where they are buying homes will also face the tougher requirement.

The government also recommended banks to halt lending to people seeking to buy a third home in places where prices had been soaring or were already too high.

As the austerity policies gain traction, house sales have fallen nationwide. China Vanke Co. Ltd., for example, said its house sales revenues dived 20.2 percent in May year on year.