China is likely to impose a property tax as part of measures to prevent a price bubble after the State Council signaled a “tougher” stance on real estate, Deutsche Bank and BofA-Merrill Lynch Research said.

China’s cabinet said yesterday it will speed up the study and drafting of tax measures that will “properly guide” home purchases. The statement followed the release of data showing property prices in 70 cities surged 11.7% in March from a year earlier, the fastest since records began in 2005.

The cabinet meeting “points towards a more hawkish stance for macro and real estate policies,” Jun Ma, Deutsche Bank’s Greater China chief economist, said in a note late yesterday. The State Council statement “appears to get much tougher on property prices,” BofA-Merrill Lynch analysts including Ting Lu wrote in a report.