The government should improve policies for real estate development in small cities and towns, according to Zhu Yilong, a member of the Chinese People's Political Consultative Conference National Committee and deputy chairman of the All-China Federation of Returned Overseas Chinese.

In big cities, housing prices have soared in recent years as land resources continue to dwindle, but in small cities and towns, the real estate market is growing because of rapid rural economic development and higher incomes.

Compared to big cities, the real estate market in small cities and towns is relatively poorly managed and lacks sound supervision, Zhu said.

Not only does the government need to establish a complete system of laws and regulations for real estate development in small cities and towns, banks should provide easier access to rural residents for housing loans.