China Property Prices May Drop 10 Percent

» Featured Columnists | By Kevin Brass | March 6, 2013 11:45 AM ET

Asia property analysts are busily shining up their crystal balls trying to predict the impact of the latest round of government measures designed to dampen China's skyrocketing property market.

Past measures have done little to slow rising prices, but experts believe these latest steps may actually change the market dynamics.

"This earlier-than-expected move suggests that the authorities are deeply concerned over a return of the property market boom, which may rekindle an asset bubble," Liu Li-gang, chief economist, Greater China at ANZ told CNBC.

Prices could drop 10 percent in the short term, as investors sit on the sidelines and second-home buyers face new restrictions, some analysts say.

"The moves [by the government] represent the outgoing leadership slamming its hand on the table, saying you have to pay attention," Paul Guest, Asian strategist at LaSalle Investment Management, told CNBC.

As we reported earlier this week, China's property stocks plummeted in the wake of  the government-imposed measures to make it tougher for investors to buy property. A day earlier "60 Minutes" aired a lengthy report speculating that China is developing a property bubble of epic proportions.

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