China's home prices will rise steadily this year despite government efforts to curb speculation and cool the red-hot real estate market, said Meng Xiaosu, advisory chairman of the country's biggest state developer.

China must increase land supply for commercial housing construction, alongside its push to build more government-subsidized homes, said Meng, who headed China National Real Estate Development Group between 1992 and 2006.

The country has banned multiple home purchases in around 30 major cities including Beijing, Shanghai and Shenzhen, on top of a slew of monetary and tax measures, stalling property transactions and slowing down price rises.

So far, Beijing has showed no signs of relaxing these measures, leading to growing expectations for an eventual fall in home prices later this year.

But Meng disagrees.

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"Administrative restrictions are like anaesthesia. They knock down patients. And doctors must do the real surgeries as soon as possible," Meng, who helped design the nation's housing reform, told the Reuters Global Real Estate and Infrastructure Summit. "Otherwise, doctors must jab another vein when patients recover."

"I don't see any trend of a downward correction in property prices until now," he said.

On the contrary, strong underlying demand, rising consumer inflation and insufficient supply of cheap houses mean home prices will continue to rise throughout the year, Meng said.

China's real deposit rate has long been in the negative territory as interest rate rises could not keep pace with consumer inflation.

A quarterly survey by the central bank published last week showed property remained the top investment option for Chinese residents, even though steady monetary policy tightening has dimmed its appeal slightly.

A lack of funding has forced the national government-subsidized affordable housing scheme to fall behind schedule.

China started building 34 million units of government-subsidized houses in the first five months, only a third of the full-year target.

After a decade's delay since the housing reform, Beijing is finally doubling its effort to build cheap homes for its poor, which will help ease social tension and pull down average property prices.

But Meng said China must also encourage residential property construction by releasing more land to increase supply of homes instead of curbing demand via administrative orders.

He said he was concerned that the suppressed demand would eventually lead to a property price rebound when China loosens its restrictions.

However, some economists and government researchers are calling for a widening of these administrative curbs nationwide, as speculators are investing in cities where policy is lax or non-existent, pushing up local home prices.