The mainland property market may recover in the second half of the year as the economy could pick up soon following Beijing's massive stimulus package, a think-tank said yesterday. The Chinese Academy of Social Sciences, launching its property yearbook in Beijing, proposed some measures such as reducing land costs, loosening credit and a tax cut to sustain the healthy development of the real estate sector. Property accounted for one-third of the country's fixed-asset investment and home sales accounted for a quarter of urban residents' consumption, the academy said. 'Under the economic adjustment period, high land prices will lead to unsuccessful government auctions of large land lots. It will reduce investment values in property development,' said Li Jingyuan, the writer of the yearbook. 'Local governments should increase land sales, lower land prices and adjust sale procedures, ensuring stable increase in supply for development.' The think-tank also suggested financial institutions should support quality property developments. The government should charge tax on projects that had been held up for a long time but consider cutting some taxes in property transactions, it said. Various taxes such as business tax, deeds and capital gains tax are charged on property transactions on the mainland. The academy also encourages mergers and acquisitions to strengthen market development and the setting up of a home purchase saving trust to provide subsidies for lower-income groups. A stable and healthy development of the property market would boost domestic consumption in the long run, Mr Li said. The academy said the central and local authorities had imposed a series of measures such as lower interest rates, reduced bank reserve ratio and easier credit to bolster the ailing property market. 'If those measures are not working, more new policies could come out this year,' he said. The academy said the home market could see a recovery in the second half of this year after a decline in both transaction volumes and values last year. Demand would continue to increase, helped by the stimulus policies to boost the market and improve the economy, it said. Cities that suffered bigger corrections could recover sooner, it added. According to the yearbook, Shenzhen property prices fell 15 per cent in December last year from a year earlier. Prices fell 5 per cent in Guangzhou but rose 1 per cent in Beijing. In Shanghai, prices fell in the last two months of 2008.