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Local commerce departments should strictly limit foreign investment in luxury real estate, the ministry said in a document published on its website Wednesday.

It reiterated foreign investors need to establish a real estate company before they can invest in real estate projects, and they should also get approvals from relevant department to expand their business scope in order to invest in new real estate projects.

The ministry said foreign investors are not allowed to bypass the above regulations by investing in domestic real estate companies via acquisition or changing the real controller of the domestic companies.

The ministry required local departments to report their approval of the establishment of foreign-funded real estate companies to the ministry. The ministry would investigate into the cases and deal with irregular cases.

The country has been trying to provide proper housing for the public by building more economically affordable apartments and curbing the rapidly rising housing prices.

However, the sales prices of new houses rose by around six percent year on year in 70 mainland's cities including Beijing, Shanghai and Shenzhen in the first three months this year.