Taking the road to sustained growth

If home prices drop or slow further after developers' offer incentives, sales may see rapid growth, a strategy that most developers use when faced with high inventories, according to a research note from E-House R&D Institute, a property market research organization.

Although the government moves may spur demand in first-and second-tier cities immediately, more measures need to be taken for the long-term growth of property market on the whole, said the experts.

Housing prices in China have remained under pressure for most of this year due to higher inventories. The number of cities that registered year-on-year home price declines of more than 5 percent rose to 52 in February from 38 in January, said the Moody's research note.

The property downturn since late 2012 has also dragged economic activity. Property sales declined by 16 percent year-on-year in the first two months of this year as new property starts dropped 18 percent year-on-year, a three-year low, according to data from the National Bureau of Statistics.

Wang Tao, an economist with UBS AG, said: "We expect further easing to occur, including one or two interest rate cuts, with the next one likely in the second quarter of this year. Specifically with regards to the property sector, sales will fall by only 5 to 10 percent this year thanks to the policy measures."

Further moves may include lowering criteria for homebuyers in those cities with purchase limits, enabling more residents in big cities such as Beijing and Shanghai to buy their first, second and even third homes. Such moves may include shortening the requirement period for homebuyers, and allowing buyers to use more of their housing provident fund to pay up the credit, according to Jenny Wu, director and head of residential operations for East China at real estate firm DTZ.