Chinese real estate prices accelerated last month, rising by their fastest pace in two years despite government efforts to cool the market amid fears of a looming property bubble.

Prices of commercial and residential property in China's 70 largest cities rose 10.7 per cent in February from the same period a year earlier, up from the 9.5 per cent year-on-year gain in January, according to China's statistics bureau.

Since the start of the year, Beijing has introduced a series of policies aimed at cooling soaring property prices and a procession of senior officials has warned of overly fast price rises and bubbles in some markets.

The figures released yesterday include subsidised and rent-controlled housing, where low price rises drag down the overall increase, as well as commercial real estate, where prices have been subdued or falling.

Analysts say housing price rises are significantly higher – and these most concern the government because they have a direct impact on people's lives and their satisfaction with Communist party rule.

Gu Yunchang, secretary-general of the China Real Estate Association, estimates average house prices in China rose more than 22 per cent. However, the statistics bureau released figures last month showing the average sales price throughout last year rose just 1.5 per cent above the equivalent for 2008.

“When I saw that figure I was also sceptical and thought they had placed the decimal point in the wrong place,” Mr Gu told the Financial Times.

The government is trying to pull off a balancing act: curbing speculators without crashing the market while leaving the door open for most of the population who have yet to own their homes.

“The central and local governments cannot suppress the real estate market too much as it plays a crucial role in the whole economy,” Mr Gu said.

Rising property prices are also raising concerns in Hong Kong, where there could be consequences at the ballot box. Five legislators recently resigned their seats, triggering May by-elections that they hope will demonstrate popular support for a faster move to full democracy.

Aware that public anxiety about the cost of housing could benefit pro-democracy candidates, the Hong Kong government announced measures last month including more land auctions to boost supply and a higher transaction tax on sales of luxury properties.

Local property tycoons have also recognised the popular mood and are reversing their earlier opposition to a government-subsidised home ownership scheme aimed at increasing the supply of affordable flats.