But Zhang Hanya was not so optimistic, pointing out decreased sales of land and apartments are likely impairing local economies as local governments' revenues rely heavily on income from land transfers and taxes on property developers.

Excessive tightening measures will hold developers back from investing, which could in turn dampen the whole economy, he said.

"The government is pretty clear the fast rebound in the economy has been largely buoyed by the property sector," said Yuan Gangming, a research fellow with Beijing-based Tsinghua University.

That explains why the government has hesitated in taking concrete measures to curb the precipitous rise of housing prices, he said.

China must tackle the property bubble for the sake of economic health, even at the expenses of a economic slowdown, according to Yuan.

The new policies may squeeze some bubbles, which will be beneficial for the economy in the long run, Yuan said.

The government has targeted 8 percent economic growth this year while pledging to improve the quality of economic growth, Premier Wen Jiabao said in his government work report at the annual session of the National People's Congress in March.