House prices continued heading north in April, in spite of the government's tough policies.

In April, 56 out of 70 monitored major cities experienced month-on-month increases in prices of new commercial residences, while only nine cities witnessed declines and five cities' prices stood unchanged, said the National Bureau of Statistics.

As for second-hand homes, prices rose in 41 cities in April over March, and 16 cities saw their prices head south.

Policymakers have pushed all their buttons to let air out of the real estate bubble. It is reported that the government is mulling measures to prevent windfall profits of property developers, including windfall tax. Since April 2006, China has been levying windfall tax on the oil industry.

"It seems that speculators are shifting from major cities to shield from government restrictions," said Liu Ligang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. "The property measures are only working in some cities but not nationwide, and it is raising new challenges for the government."

"Reduced bank lending, rising interest rates and increasing property supply would inevitably bring down sales and profit margins while also worsening their balance sheet liquidity for some developers," said Moody's Investor Service in a recent report.

The tightening measures would hinder further price rises and lead to a mild correction in cities where housing price soared over the past 12 to 18 months, said the credit rating agency.