BEIJING, Jan. 12 (Xinhua) -- The Chinese Academy of Social Science (CASS), a top thinktank in China, has warned of the potential danger of a property bubbles burst in China in a report on the world economy in 2007.

    Citing the example of the real estate burst in Japan in the early 1990s, the report advised the Chinese government to take effective measures to curb skyrocketing housing prices.

    Before Japan's economy faltered in 1990, the yen appreciated, housing prices surged and the stock market boomed just like China at the moment, it said.

    The report recognized the macro-economic control efforts the Chinese government made last year including raising deposit reserve ratios, curbing investment in fixed assets and using industrial policies to boost the supply of small affordable apartments.

    "Housing is a key element of domestic consumption. With housing prices continuing to rise, the government must beware of a property bubble," it said.

    The report suggested the government restrain credit until the sizzling real estate sector cools down.

    The average housing price of newly-built apartments in China's 70 major cities rose 5.8 percent year-on-year in November last year.

    Housing prices in Fuzhou, capital city of southeastern Fujian province, posted the fastest increase of 10.4 percent in November, followed by Beijing with a rise of 10.3 percent.

    Housing prices in coastal cities including Shenzhen, Xiamen and Qinhuangdao also posted an increase of over 9 percent.

    Shanghai is the only city that witnessed a slight drop of 0.1 percent in housing prices in November.

    In November, the average prices of second-hand houses in the 70cities rose by 5.2 percent over the same period of last year and the prices of commercial buildings increased 4 percent year-on-year.