Experts urge preparations for home price drop

While China strains to rein in soaring home prices in major cities, some voices are asking policy makers to prepare for a possible price fall.

Home demand is slowing in China, and the pressure to prevent price dives instead of hikes will gradually dominate starting in 2016, said Zhong Wei, an expert in the sector with Beijing Normal University on Wednesday.[Special coverage]

Speculators are leaving the property market as diversified investment channels provide high-yielding products, and young people of marriage age, who are major home buyers, will decline, said Zhong.

Official data showed that 4.86 billion square meters of new homes across China were under construction last year, while home sales stood at just 1.16 billion square meters.

"Further measures aiming to boost supply and curb demand may increase the risk of a property bubble burst," Zhong said.

Zhong is not the first to warn of such risks. Industry insiders said earlier that falling home prices will generate a wait-and-see mood among potential buyers and aggravate stockpiles in the sector as a result.

A sluggish property market will mire related industries, such as steel, cement and home appliances, and result in waning land sale revenues, on which many local governments rely.

Despite all the arguments, many Internet users said that they didn't believe these experts and considered them mouthpieces of home developers and local governments.

Whether a turning point in China's skyrocketing home prices is around the corner remains a hotly discussed question, and the country's property market has showed signs of cooling down.

Of 70 major Chinese cities, six saw monthly drops in new home prices in January, while the number was only two in December, according to official data.

The average monthly increase for new homes slowed slightly to 0.49 percent in January from 0.51 percent in December.

Prices of existing homes also cooled, declining in 13 cities, compared with only five in December.