Step forward Genzo Kimura, economist at SuMi TRUST. Kimura believes the Chinese real estate market is experiencing a “gear change” and can decelerate without the much-dreaded “hard landing”. To add to phrases, Kimura argues that the world’s second largest economy can enter a “new normal”. Tax and public housing policy, allied to financial liquidity, will prevent the country suffering a juddering slowdown.

Through these three key measures China can avoid a hard landing for property, the economist said.

A number of commentators are wondering how China, which has seen massive investment in property over the years, will adjust as the country seeks to curb red-hot growth without putting markets, and the financial system, under undue strain. Concerns about bank exposure to real estate, for example, have been a feature of commentary over the past year.

“The imminent collapse of the Chinese real estate market has been a hot topic of late. The worry is with good reason, with the real estate market in China struggling over the past year with low sales and depressed prices,” Kimura said in a note.

“However, with January’s uptrend in the number of contracts (22 per cent year-on-year) and the central bank’s announcement of a lower deposit reserve ratio, housing prices have risen in first-tier cities. We therefore believe that the real estate sector has managed to survive its difficult time and has started to turn a corner,” the note continued.

The economist does not think policymakers in Beijng will pursue any sort of benign neglect policy and allow property markets to deteriorate, so they will introduce stimulus measures to bolster demand if necessary.

Kimura also reckoned that action by the People’s Bank of China, the central bank, should be positive for real estate.

“After more than two and a half years' wait, the People’s Bank of China lowered the required deposit reserve ratio by 50 bps on 4 February, which many believe will reduce the risk of capital chain fracture. It’s highly anticipated that the rate cut will kick-start the real estate market in the latter half of 2015. Furthermore, it’s highly likely that the central bank will further stimulate the market should it fail to recover. For property buyers, commercial banks have lowered the threshold of property loans which makes it much easier to buy a second house,” Kimura said.

Tax policy was highlighted in the note: “China has introduced a pilot project to reform the tax system to merge service industries into the scope of the Value Added Tax from the Turnover Tax. It’s hopeful that the real estate sector will be merged into the VAT regime this year according to Xiaolin Guo, the spokesman of the State Administration of Taxation. In that case, companies could subtract input VAT deductions when calculating taxes payable. In another words, they will spend less on taxes. Therefore, the tax deduction leaves more room for the real estate industry to reduce their inventories through a price cut.”

Another piece of the jigsaw, Kimura wrote, is public housing policy. “A wide dispersion in commercial property sales has been seen among different tiers of cities. Real estate companies in third or fourth-tier cities are faced with high inventory of apartments. To address the issue, local governments have taken measures like buying in the name of the government and using the property as public housing.”

“As with China’s economic growth, the real estate market is also experiencing a gear change and is prepared to enter a new normal. At the same time, the Chinese government will offer policy support to ensure sufficient land supply and maintain market liquidity. In addition, there is still rigid demand stemmed from urbanisation. We hope to see the real estate sector recover by the end of 2015 and maintain stable growth in the future,” the note concluded.