* China Jan-Feb property sales climb 25.1 pct, outpacing 2016 rise
* Steel capacity cut expectations also aiding steel prices
* China Jan-Feb steel output up 5.8 pct from year ago (Adds China steel output, updates prices)
By Manolo Serapio Jr
MANILA, March 14 (Reuters) - Chinese steel and iron ore futures climbed about 4 percent on Tuesday, extending steep gains from the previous session after a spike in property sales in the first two months of the year suggested steel demand will remain supported.
Expectations that China will strengthen efforts to curb excess steel capacity also aided prices.
The most-active rebar on the Shanghai Futures Exchange closed up 3.8 percent at 3,594 yuan ($519) a tonne, after earlier hitting a two-week high of 3,615 yuan.
Iron ore on the Dalian Commodity Exchange ended 4.3 percent higher at 686.50 yuan per tonne. The steelmaking ingredient initially touched 697.50 yuan, its highest since March 2.
On Monday, rebar jumped 5.9 percent and iron ore rose 4.3 percent.
China's property sales surged 25.1 percent in January and February, outpacing the 22.5 percent annual gain in 2016, which was the strongest annual growth in seven years thanks to a property boom in top-tier cities.
"Fundamentally, steel prices may be supported again given the strong property market," said Wang Di from CRU consultancy in Beijing. "But we still need to see whether it's going to be sustained."
Also supporting steel prices is China's sustained campaign to tackle a glut, with Beijing having pledged to eliminate 50 million tonnes in excess steel capacity this year as well as shut down production of low-grade steel products by end-June.
Comments from a Chinese government official that the capacity to be removed from low-grade steel would be on top of the 50 million tonnes "also injected bullish sentiment into the market", said Di.
Amid firm demand and higher prices, China's steel output in the first two months of 2017 rose 5.8 percent from the same period a year ago to 128.77 million tonnes, government data showed.
The rally in futures boosted offers of physical iron ore cargoes in China, traders said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1.8 percent to $88.26 a tonne on Monday, according to Metal Bulletin.
"Enquiries also improved for both seaborne cargoes and port materials, though caution remained as the market appeared to be just starting to recover," Metal Bulletin said in a note. ($1 = 6.9193 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)