The real estate regulation policies of the past few years have been effective in capping property prices, but it is impossible that property prices would decline sharply, due to the concurrent increase in financing channels for property developers, including bank loans, trusts and private loans.

Since economic growth declined swiftly after the real estate sector came under control, the government relaxed monetary policy to inject more liquidity to the interbank market at the end of 2011.

This eased the availability of capital to property developers, and lifted their cash flow crisis  at the peak of the loosened policy in the third quarter of 2012.

Meanwhile, a large number of lending institutes profited from the real estate industry, encouraging them to lend even more.

As such, property prices were supported.

The author is Huang Rentian, a commentator.