Home prices in China extended their rally in March for the 10th straight month as sentiment among buyers continued to pick up.

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The average price of new residential properties across 100 major cities rose 1.06 percent from a month earlier to 9,998 yuan (US$1,592) per square meter, accelerating from February's 0.83 percent increase, the China Index Academy said today.

Fifty-one of the 84 cities that posted gains saw an increase of more than 1 percent. 

In February, 74 cities recorded month-on-month growth, with 41 seeing a rise of more than 1 percent.

Zhanjiang in Guangdong Province led last month's gainers with a 3.66 percent rise. 

Sixteen cities posted price drops, with three shedding by more than 1 percent. Wenzhou in Zhejiang Province retreated 3.65 percent from February, the biggest decline.

"Panic seen across the country over the past month as home seekers rushed to buy existing houses in order to avoid extra transaction cost before a 20-percent capital gains tax is implemented also helped boost sentiment in the new home market," the academy's report said. 

"Meanwhile, more real estate developers trimmed or cancelled their price discounts as the traditional high season for property purchase are arriving."

In the country's 10 largest cities, the average price for a new home climbed 1.25 percent from February to 16,803 yuan per square meter, with Beijing, Guangzhou and Shenzhen all seeing gains of more than 2 percent. It rose 0.45 percent in Shanghai.

The State Council, China's cabinet, rolled out an array of measures on March 1 in its latest bid to tighten control over the property market amid expectations of rising housing prices.

These included a 20-percent tax on capital gains from home transactions - compared to the previous transaction tax of 1 to 2 percent of the final sale price. 

This triggered a wave of panic selling and buying.

In Shanghai, data released today by Shanghai Deovolente Realty Co showed new home sales soared to a 40-months high in March, triggered by fear over the pending capital gains tax.

Purchases of new residential properties, excluding government-funded affordable housing, jumped 180 percent from February to 1.54 million square meters, the highest monthly volume registered since December 2009.

Average cost, meanwhile, fell 7 percent from a month earlier to 22,896 yuan per square meter, as 72 percent of the houses were located beyond the city's Outer Ring Road, a decrease of 8 percentage points from that of February, according to Deovolente data.

On the supply side, 1.33 million square meters of new houses were released to the local market last month, the highest monthly release since January 2011.