Ou Ruiming, an analyst at Guosen Securities, said that despite signs of a potential rebound last week, the rally was unlikely to be sustainable in the short term and the current low valuations did not necessarily signal a buying opportunity.
A series of tough policies rolled out by the government caused a dive in share prices of the real estate sector. They included a ban on loans for third home purchases and raising down-payment requirements for second home mortgages.
English.news.cn reported that many investors fear the government’s aggressive measures to cool the property market could trigger a slowdown in the overall economic growth.
Jing Ulrich, chairwoman of JP Morgan’s China equities and commodities, dismissed such concerns, saying "China’s ongoing urbanization process and the massive railway expansion will still support the property sector in the long run."