First it was Beijing, then Shanghai and now it's going further inland to Nanjing. The governments of second tier cities and smaller are sticking their fingers into theChina housing bubble, now two years old.

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Both Beijing and Shanghai have increased down payment requirements on second homes and upped a sales tax from 2% to 20% on all used home sales.

Moreover, in Beijing, it is now against housing regulations to buy a second home in the same city. The central government is asking other cities to do the same thing immediately.

All of this is a means to curb China's red hot housing market, which was ranked in the top 10 of countries whose real estate values have risen most in 2012. Investors have expressed concern over housing over the past year, both as a gauge to economic health and monetary policy.  The iShares FTSE China (FXI) exchange traded fund continues to underperform the MSCI Emerging Markets index because of that fund's underlying weighting in finance, many of them insurers and banks tied to the housing market.

According to the China Real Estate Index System, prices of second-hand homes rose 2.81% from February this year. On a year-on-year basis, second-hand home prices rose 18.06% in March.

Most cities have pledged to lower home prices below the rate of wage inflation, but are still toying with whether or not to impose the 20% tax on second hand home purchases.