Analysts warned that high housing prices in Shenzhen would discourage highly skilled staff from working in Shenzhen.
Rental housing costs in Beijing are rising, partly due to prospective home buyers suspending purchase plans and continuing to rent.
Mainland stocks fell for the first time in three days, led by developers and commodity producers, on concern the government will step up tightening measures after property prices rose at the second-fastest pace on record.
Beijing's housing market has fallen sharply, hitting a record low last week, with industry experts warning that sales of homes are expected to go down even further.
Home prices in 70 large and medium-sized Chinese cities rose by 12.4 percent year-on-year in May, the National Bureau of Statistics (NBS) said in a statement Thursday.
Property sales in China's major cities of Beijing, Shanghai and Shenzhen dropped in May, with house prices declining as well, the Economic Information Daily reported Tuesday, citing data from a real estate brokerage.
Experts predict considerable drop in prices in months to come
China will surpass both the UK and Japan to be the world's second largest property investment market by 2011, a report by international real estate service provider DTZ said.
China's property stocks are becoming more attractive after recent declines, Citigroup Inc analysts Markus Rosgen and Elaine Chu said in a report distributed today.
Property sales in Beijing, Shanghai and Shenzhen fell as much as 70 percent in May as developers delay sales following government tightening measures.
Prices of Shanghai's luxury residential properties remained strong over the past one-and-a-half months although transaction volume plunged amid weak market sentiment caused by a state-level crackdown on speculation in China's overheated housing market, according to a latest industry research.
Real estate on the Chinese mainland and Hong Kong retains a strong long-term allure despite current fears of a damaging bubble, according to an influential player in the regional market.
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