Analysts at Credit Suisse said in a note to clients said that in the near term, "the China property sector should outperform on the sales momentum." The outlook for the second half of 2010, however, "remains uncertain with policy risk and financing concerns."
Almost every analyst company is covering its bets in this way. It may go up and then it will go down or it may go down and then slowly go up. Or vice versa. Or none of the above.
Most property shares traded in Hong Kong and Shanghai had witnessed steep declines late last year when China’s State Council announced the rollback of a tax break on residential units that are resold between two and five years after purchase.
Authorities also followed up on those measures by curbing bank lending and fine-tuning policies to slow credit flows to the property sector. But since the end of January, many Chinese property stocks have rallied more than 20%.
Aanalysts pointed out that transaction volumes have rebounded over five consecutive weeks, and "with more supply in April and May, this momentum should continue."
But other analysts pointed out that the state-run Xinhua News Agency last week released several commentary papers to criticize the speculative activities in the property market and irrational public land auctions, calling for more government policies, including property tax to rein in property prices.
MarketWatch reported they said, "We regard this as a sign of more government policies ahead." And "if property prices continue to rise, the government might introduce property tax earlier than expected."