These steps would follow a potential cut in medium-term lending facility rates or reserve requirement ratio, the report said. The measures would boost housing demand in families, especially those with two or more children outside of core regions of China.
"The policymakers will probably have to reconcile any new stimulative measure with the overreaching guideline that 'housing is for living, not for speculation,' even though the mantra could be omitted in upcoming policy meetings," Citi economists wrote.Nomura's Chief China economist Ting Lu said "the situation of China's property sector appears dire."
The Japanese investment bank doesn't expect a "bazooka" stimulus package but predicts it will be introduced in a cautious manner. "We believe measures will be introduced in a piecemeal step-by-step manner, and be implemented mainly in tier-2 cities," Nomura economists wrote. They pointed to the latest wording from top policymakers and their emphasis on "security" – how this is an indicator for the scale of a stimulus package to come.