With a 3.9 percent growth rate for housing prices, Haikou, capital city of tropical Hainan province, ranks first among the country's 70 large and midsized cities in June, while Sanya, a resort city at the southern tip of Hainan Island, ranks fourth, with a month-on-month price increase of 3.2 percent, the China News Service reported Wednesday.

Jinan, capital city of East China’s Shandong province, came in second with an increase of 3.6 percent month-on-month, and Dandong in Northeast China’s Liaoning province ranked third, with a month-on-month growth of 3.3 percent.

Real estate experts believed that the rise of housing prices in Hainan has been boosted by the decision of the Chinese government in April to support Hainan in building the whole island into the China (Hainan) Pilot Free Trade Zone and gradually exploring the establishment of a free trade port with Chinese characteristics.

In early June, Hainan announced the establishment of the Haikou Jiangdong New District in the provincial capital to enhance development of the pilot free trade zone.

The serial government steps spurred a continuous rise in housing prices on the island, especially in Haikou, even though the local government has introduced the islandwide quota policy to curb speculation in the housing market.

In late April, Hainan issued a circular requiring those who do not live on the island but want to buy houses to provide 60 months of tax records for the past 60 months in Hainan from at least one member of the applicant's family.

A minimum 70 percent down payment is required for nonresidents of the island who apply for commercial housing loans and a five-year limit has been set for owners to transfer their real estate assets in Hainan.

The new rule was regarded as the most stringent restriction policy on housing purchases in recent years in the country.

Statistics from Jincheng Consultancy, a real estate information provider based in Haikou, showed that more than 80 percent of the houses were purchased by people who do not live on the island but want them for vacations and retirement. Quite a number of them have invested for profit.