CHINA'S latest effort to rein in speculation in its real estate market - an increase in down payments and interest rates for people who hold more than one mortgage - won't likely lead to a plunge in housing prices, industry experts attending a recent property forum in Shanghai said.

"The new policy to curb speculation is necessary, but I don't think it will trigger a very significant impact on the country's real estate market," said Liao Qun, vice president and chief economist of China banking at CITIC Ka Wah Bank. "In my opinion, more measures are needed to help cool the property market."

The People's Bank of China and the China Banking Regulatory Commission announced on Thursday night that mortgage holders who apply for another home loan are required to produce a down payment of at least 40 percent and pay a 10 percent premium on their interest rate.

Since June 2006, home buyers have been required to provide a down payment of at least 20 percent on apartments smaller than 90 square meters and 30 percent on larger properties.

Zhou Chunsheng, a professor at Cheung Kong Graduate School of Business, shared Liao's view.

"The new regulation will surely have some impact on speculators, but it won't necessarily lead to a drop in housing prices," Zhou said. "While we talk about price fluctuations, we should always take both supply and demand into consideration."

Industry experts said the scarcity of developable land as well as the accelerating pace of urbanization will prompt housing prices to go further north in the long run.

"I don't believe housing prices will decline, and the only question now is how fast they will grow," said Zhang Li, a vice president at Morgan Stanley.

Property prices in 70 major Chinese cities jumped 8.2 percent in August from a year earlier after gaining 7.5 percent in July, the biggest increase in almost two years.

Shanghai's second-hand housing index, a major indicator reflecting the average housing price for Shanghai's used apartments, soared 6.03 percent in August, the highest growth since 2004.

Meanwhile, the sales price of new apartments rose 3.6 percent in Shanghai in August, an increase of 1.4 percent compared with the same period a year earlier.

' I don't believe housing prices will decline, and the only question now is how fast they will grow. '