The bullish assessment by Minister Jiang Weixin appeared to cast doubt on government pledges to curb runaway prices that have fuelled fears of a real estate bubble and concerns that they were rising out of reach of many Chinese.
"I think this year the housing market will progress at a steady pace," Jiang told reporters at a briefing on the sidelines of the country's annual session of parliament.
"My prediction is that the upward pressure on housing prices will remain great for the next 20 years because demand will be huge due to rapid urbanisation and industrialisation and because our land is limited," he added. "Therefore we face huge price pressure."
Premier Wen Jiabao on Friday singled out the issue as a top government priority in an address to open parliament, saying Beijing would crack down on illegal practices aimed at driving up prices to ensure the "steady and sound development of the real estate market".
"We will resolutely curb the precipitous rise of housing prices in some cities and satisfy people's basic need for housing," Wen said.
Massive bank lending in 2009 has triggered fears that the cash flood has fed a spending spree by property speculators. Prices in 70 major cities rose 9.5 percent in January from the same month a year ago, the fastest pace since April 2008, the latest official data shows.
Jiang indicated the problem was being exacerbated by local governments for whom the property transfer fees are a significant source of revenue. "I think local governments are very happy to see housing prices rise because this means more fiscal revenue for them," he said. "So local governments have the obligation to fix this problem. This is a top priority in their work as instructed by the central government."
China's far-flung provincial, city and county level governments have a patchy record on following through with initiatives handed down by Beijing due to pressure to maintain economic growth in their areas. Beijing has been trying to cool the property sector by restricting lending, requiring buyers of second homes to put up a down payment of at least 40 percent and hiking interest rates on mortgage loans.