Housing markets in some small Chinese cities are seeing a new boom as reports abound they'd be included in an extended property purchasing curbs by the central government. The policy is part of escalating efforts to cool down China's property market.

Housing markets in some small Chinese cities are seeing a new boom.

In Weifang city, Shandong Province, home sales for the first half of 2011 climbed 20 percent year on year.

Only hours after this new complex hit the market this morning, the sales center was already filled with potential buyers.

Chen Xiangsheng, project manager of Shangdong Jinqing Construction Group said, "Market rumors say the extended purchase limit policy will include Weifang. Recently, we've seen a new rush in the housing market. Our newly opened complex offers 260 apartments. We expected to sell up to 100 for one day. But judging from the number of buyers this morning, I think we can sell more than half today."

Wang Jiandong, a resident in Weifang City said, "We heard Weifang may be included in the purchase limit policy, so I came here early this morning to see if I can snatch up an apartment before the policy is in place."

The speculative rush has extended to the city's previously owned housing market. A local agency says their sales of these homes in August increased 30 percent year-on-year.

But the short term boom hasn't stopped developers and agencies from worrying about the long term.

Zhang Rongqiang, Deputy GM of Weifang Hengxin Construction Group said, "If the policy is implemented, sales will be hurt. Market speculators would be gone and investments will also be curbed. Small and medium sized agencies will face hard times."

However, industry insiders say the property limits are designed to curb market speculation, so drastic declines may not occur in small cities like Weifang where most people are buying houses to live in, rather than as investments.

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