Central government curbs on property buying could be eased by the middle of next year in view of a correction in the market, according to a report by Macquarie Capital Securities.
It expects a relaxation because it sees prices falling up to 20 per cent, land sales dropping sharply and a slowdown in capital expenditure on construction and new-home starts.
Beijing in January announced eight measures to cool the property boom, including curbs on lending and limits on the number of flats that can be purchased by registered residents (the limits vary from city to city). As a result, sales plunged.
Already there are signs of easing. From today, residents of Foshan in Guangdong will be allowed to buy another flat if the price is less than 7,500 yuan (HK$9,170) per square metre - a sign local authorities may rein back on cooling.
Soufun Holdings, the mainland's biggest property website, suggested that sales of homes in 20 major cities slipped by an average of 32 per cent from a year earlier during last week's National Day holiday - a traditional sales peak for developers.
Prices were also reported to have fallen slightly, with Soufun's property price index for 100 cities down month on month, by 0.03 per cent, for the first time in a year.