Two consecutive years of decline in land sales while construction starts have led to a healthy adjustment (like improving demand-supply balance) in the China property market but resulted in weaker real estate FAI, hurting GDP growth. We expect further policy relaxation in next six months to boost FAI, which presents positive trading catalysts for China property stocks. However, such relaxations could stimulate aggressive landbanking and borrowing behavior among Chinese developers, leading to sharp land price increases (i.e., faster than home price growth), resulting in greater margin squeeze, slower organic NAV and earnings growth, and higher net gearing for the developers.