The 32-year-old lawyer, who came from East China's Zhejiang Province five years ago to seek for a better life in Beijing, plans to spend about 800,000 yuan (US$96,386) buying a 120-square-metre apartment near the Third Ring Road.

"I have chosen a suitable one," he said. "I will pay the downpayment in the next few weeks."

Niu Li, a senior economist with the State Information Centre, said Jiang's story will not be the only case.

Many people in need will continue to buy homes of their own, although the interest rate hike announced by China's central bank last week could increase their financial burdens, he said.

The People's Bank of China announced last Thursday that the central bank would rise the benchmark interest rates on one-year yuan loans to 5.58 per cent from 5.31 per cent and the rate on one-year deposits to 2.25 per cent from 1.98 per cent.

"The significance of (the rate rise) is more symbolic than actual," Niu said.

It sends a signal to both housing developers and buyers that the central bank might further raise the interest rate, he said.

"But the rate hike will have a big impact on speculative purchasing," he said.

The speculators will consider whether they can make money or not after the rate hike, he said.

China's housing prices rose rapidly during the first three quarters.

Average property prices rose a year-on-year 13 per cent during the January-September period compared with a year ago, according to figures from the National Bureau of Statistics.

Prices for residential housing rose a year-on-year 10.9 per cent during the same period.

"Soaring prices in cities such as Hangzhou and Nanjing indicate speculative bubbles exist in the cities," Niu said.

Spokesman Zheng Jingping with the National Bureau of Statistics said at a press conference last month he could not rule out speculative factors (in housing prices).

He said the government should pay close attention to prevent prices from rising too rapidly and prevent a speculative bubble.

Zhang Yan, an analyst with the Beijing-based China Securities, said the rate hike would have a certain impact on people's expectations for the future.

"Some people might keep their money in hand and take a wait-and-see attitude to home purchasing," she said.

This would bring difficulties to real estate developers, who are eager to sell their products, she said.

"It would also lead to price fluctuations on the real estate market," she said.

Decline in demand in the short term would restrict housing prices from growing too much, she said.

Pan Minglang, vice-president of the real estate developer HKI International, agreed housing prices would not rise too much in the coming months, although the rate hike could increase costs for developers.

"Many factors including land cost and competition, rather than merely interest rates, have impacts on real estate prices," he said.

Housing prices will not drop obviously, he said. But developers may offer small favours for buyers to promote sales.

Zhang Xueying, another senior economist with the State Information Centre, said he felt there were some bubbles in the real estate sector, referring to high prices beyond the reach of many people.

A 100-square-metre apartment in Beijing could cost 700,000 yuan (US$84,337) to 800,000 yuan (US$96,386).

"How can developers expect ordinary residents, who earn an average of about 10,000 yuan (US$1,205) per year, to buy them?" he said.

"If these people do not buy them, who will buy?" he said.

The interest rate hike might have a certain impact on the housing prices, he said.

Zhang Liqun, a senior researcher with the State Council's Development Research Centre, said China's real estate industry could become an important propeller for the country's future economic development.

Urban people's strong desire to live in more spacious homes will demand a large amount of housing.

The country's 800 million rural people will also create strong demand during the country's urbanization process, he said.

Property investment in China reached 835.7 billion yuan (US$100.7 billion) during the first three-quarters of this year, an increase of 28.3 per cent from a year ago, figures from the statistics bureau indicate.

Investment in residential housing reached 568.4 billion yuan (US$68.5 billion) during the period, an increase of 27.4 per cent.