Macquarie Research said RRR and interest rate cuts should help the improving China's property market, especially in T1/2 cities.
Apart from relieving buyers' financial burden, successive rate cuts send a strong message that the physical market remains in relaxation mode, till end of 2016, said the research house.
Macquarie expects price appreciation expectations to cause panic buying first in T1 cities, such as Shenzhen, followed by T2 cities, after the latter cleared up inventory towards the end of 2015.
It said price growth in T1 cities may exceed 20% by the end of the year while T2/T3
cities may only see 5% price growth, mainly occurring in 4Q.
It reiterated its "overweight" view on the sector, and believes more relaxation measures will come, but it emphasized careful stock picking. Macquarie's top picks remains CR Land (01109), Franshion (00817), KWG (01813) and Sunac (01918).
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