Slowdown
After a decade of average growth in the industry of about 25%, a slowdown took place in 2011-12.
In 2013, the industry showed signs of recovery but amid policy controls, stronger competition, rising costs and market oversupply in some places, such rates will not to be achieved again in the foreseeable future.
However, unlike many other countries, even if a price correction takes place in first- and second-tier cities, it is not seen as likely to lead to a national housing or financial crisis, unlike most mature Western markets, due to the fact that such cities only represent a small share of the total market.
For instance, first-tier cities account for 4.7% of the total population and 3.8% of the residential property transactions.
Divergence
As the residential market changes drastically from the past decade, an increasingly notable difference between major and smaller cities is emerging.
Demand in first and, to a large degree, second-tier cities, where purchasing power is stronger, remains robust, and the supply of residential property is not always sufficient.
On the contrary, in third- and forth-tier cities, supply exceeds demand and price growth has been fading.
Bank lending
Chinese commercial banks are becoming increasingly reluctant to provide mortgage lending, bringing about new fears about a future market correction.
As the market is reaching a more mature stage and the downward risks are rising while profitability from individual loans is wearing thin, banks are much more conservative in their approach. The country's central bank, the People's Bank of China, has recently urged banks to speed up lending to home buyers - especially first-timers - but their reaction has so far been muted.