Home prices may rise 3-5 percent in 2013

China's home prices may rise 3 to 5 percent next year, given a stable real estate policy, JP Morgan said in a research note on Monday.

"As the housing market gradually stabilizes and the government continues the existing property tightening measures, we expect that national house prices will increase modestly by 3-5 percent in 2013," said Zhu Haibin, an economist with JP Morgan. "A strong rebound or sharp decline in house prices is unlikely in the near term."

Property tax, which was introduced in Shanghai and Chongqing, is likely to be expanded to other cities in the second half of 2013, but the impact on the housing market will be limited, the research note said.

"From the policymaker's perspective, stable housing market developments remain a priority policy objective," said Zhu.

The investment bank's calculations show that the ratio of housing under construction is about 4.2 times the home sales in the last 12 months, which is significantly higher than the historical average of 3.3. This reduces the likelihood of another housing boom in the near term, the report said.