Shanghai has drafted a new rule to regulate group renting, the practice of dividing apartments into smaller rooms and renting them separately, and vows to substantially raise the penalty imposed on illegal renters.

In an interview during the current session of the city's top political advisory body, Liu Haisheng, head of the city's housing security and management bureau, said the city has drawn up a draft of the rule and plans to release it as early as next month, Oriental Morning Post reported on Monday.

One highlight of the new rule is a substantial rise in the penalty on tenants who illegally sublet apartments to others, a practice that now has a fine of up to 30,000 yuan ($4,950). Authorities said that is too low.

Other members at the political body suggested a coordinated effort by authorities in the city's districts to clamp down on the illegal renting practice.

Despite efforts to discourage property speculation and develop affordable housing, skyrocketing housing prices in China's major cities are pushing new arrivals to share overcrowded living spaces with others or to live in basement apartments.

Figures from the National Statistics Bureau show that housing prices in most of the country's cities continued to rise in recent months. Shanghai led the first-tier cities of Beijing, Guangzhou and Shenzhen in December's housing price growth with a 21.9 percent jump year-on-year.