CHINA'S first- and second-tier cities, where land supply remains largely inadequate, will see more growth in home prices, a senior government official has said.

As large or high-level cities such as municipalities and provincial capitals generally have more administrative resources and better public services, they will remain attractive to home buyers from across the country and therefore provide further room for home price growth, Li Tie, an official with the National Development and Reform Commission, told the Economic Information Daily in a recent interview.

Moreover, compared to bank savings, securities and funds, real estate is a more stable investment channel and the scarcity of land in large or high-level cities will certainly enable home prices to go further north, Li said.

Thirdly, the increasing number of wealthy people in China will also offer solid support for high home prices in bigger cities, according to Li.

However, Li warned that some of smaller Chinese cities could suffer from a bursting of the property bubble if local governments maintain their current pace of development.