The comments underscore Beijing's determination to keep a lid on rising home prices, a source of social discontent, especially in the run-up to a once-a-decade leadership transition this year.

To curb price rises, Beijing is urging local authorities to increase housing supply and to strictly implement a policy aimed at restricting home purchases, said the People's Daily, the ruling Communist Party's official newspaper. It quoted an unnamed official at the Ministry of Housing and Urban-Rural Development.

"With more affordable housing projects put into operation and market expectations kept stable, the conditions do not exist for a full-scale rebound in house prices," said the official.

The comments came amid new concerns that a new round of property inflation was in the offing, with data showing a pick-up in housing sales as well as an increase in property prices following eight consecutive monthly declines.

Latest figures showed that Chinese house prices rose 0.1 percent in August from July, extending a modest price increase into a second straight month.

Revenues from property sales in the country rose for the third month in a row in August from a year earlier, reinforcing signs of a recovery in the sector.

But the official played down worries about a rapid revival in the property market, saying the recent price increase was mainly a result of stronger real demand from first-time buyers rather than speculative demand from investors.

Officials have rejected calls to relax restrictions on the property market in order to bolster the economy, on course for its seventh straight quarterly slowdown over the July-September period.

Full-year growth for 2012 is likely to fall to 7.7 percent, the weakest showing since 1999.

"Macroeconomic control over the property market is at a critical point and we are still facing an arduous task to consolidate the effect of property market curbs," the official said.

The cabinet sent out eight inspection teams in July to ensure that local governments continued to enforce property market restrictions to clamp down on speculation.

Beijing will also expand a trial property tax reform program to more cities beyond Shanghai and Chongqing and establish a long-term mechanism to "improve macro-policy control" over the property market, the report said, without elaborating.

(Reporting by Aileen Wang and David Stanway; Editing by Ron Popeski)

• A Permanent Economic Emergency