In Shenzhen, of all buyers of second-hand homes since the end of 2015, 30 percent made the purchases for investment purposes, up from 20 percent in the third quarter of 2015 and triple the ratio of 2011, according to real estate agency Homelink.

Li called for government interventions to curb speculation, which he warned could destabilize the financial system.

Officials have already sent such signals. "The home prices in Shenzhen rose too fast last year ... We're studying policies to ensure the prices are in a reasonable range," Xu Qin, mayor of Shenzhen, said at a press conference in early February.

Xu Gao, chief economist at Everbright Securities, predicted more differentiated policies to be rolled out to counter excessive price growth in top-tier cities and at the same time destock the housing sector in small ones.

"Prices in top-tier cities will likely rise more slowly after such policies take effect," he said. "In third- and fourth-tier cities, market correction will continue."

As of the end of January, first-tier cities saw unsold new homes fall 12.9 percent year on year, but the inventory in second- and third-tier cities declined by only 3.9 percent and 0.8 percent respectively, according to data from E-house China R&D Institute.

There were 719 million square meters of finished but unsold properties across China at the end of 2015, up 22.2 million square meters from the end of November, NBS data showed.

With properties under construction taken into account, it will take five to six years, or even longer, to destock the whole industry, according to estimates by Xia Dan, senior researcher at the Bank of Communications.

Many third- and fourth-tier cities have introduced various incentive plans to accelerate destocking, from subsidizing qualified home buyers, loosening mortgage rules, to rewarding farmers who give up rural homesteads and buy urban homes.

Qu Hongbin, chief China economist at HSBC, predicted housing policies to loosen further in the coming months.

"Depending on the scale of the policy easing, housing investment could stabilize or even stage a moderate recovery in 2016," Qu wrote in a research note.