China will step up tightening measures in the residential property sector in smaller cities, following pilot programs in Beijing and Shanghai, Bloomberg reported, citing the summary of a State Council meeting. Second- and third-tier cities in which property prices have risen dramatically will impose limits on the number of homes each family can purchase. The announcement comes after data released this week revealed that housing transactions rose 31% year-on-year in June, despite a raft of new tightening measures. Many analysts noted that the threat of measures may be as much psychological deterrence as actual policy. “If the government doesn’t step up to say anything at the half-year point, the market will interpret it as the government is tolerant to gains in the housing market,” noted Yao Wei, an economist at Societe Generale.