According to a report released by Citigroup, a survey of 3,000 households in mainland China's real estate market show that 49% of sellers choose to retain cash or invest in stocks and bonds; only 19% accept lower prices; 73% still prefer new buildings, but 60% require completed new units; 16% seek smaller areas; only 38% are more interested in purchasing after recent policies were introduced; 48% expect housing prices to rise in the next two years; and 38% have a budget of an average of 0.158 million yuan for renovations.

The bank believes that it will take time for confidence to be restored in the mainland property market. The bank prefers stocks with strong cash flow and profitability under the trend of soft landing, with first choice being R&F Properties (01109.HK) and KE Holdings (02423.HK).

Regarding mainland bank stocks, although the initial policies seem to have a mild effect on buyers' emotions, the bank believes that more policy support is forthcoming. The bank prefers China Construction Bank's (00939.HK) H shares, which offer a high dividend yield, and anticipates potential upward potentials under reduced dividends tax for southbound investors.