A property tax is "inevitable but not imminent," Michael Klibaner, head of research at property services firm Jones, Lang, La Salle, said June 8, in a largely upbeat assessment of the Chinese real estate market.

Mr. Klibaner said the current round of market-cooling measures introduced by the government, including raising minimum deposits and restricting second home purchases, had been effective, and he saw no further action being taken in the near future.

"We have seen the end of this phase of tightening," Klibaner said. "The government has achieved its goals. It does not want to crush the market."

He added that even when a property tax is eventually introduced, it may be limited to the Tier 1 cities of Beijing, Shanghai and Guangzhou. And implementation of the tax need not necessarily trigger a large scale sell-off by investors.

"In China, high transaction costs mean that the incentive is to buy and hold," he said.

Klibaner pointed to China's breakneck urbanization to support his optimistic outlook on residential property. On current trends, he said an additional 80 million people would move to the cities by 2014, and the number would reach 200 million by 2022.

"This is not Dubai. There is fundamental structural demand," he said.

Klibaner is less sanguine about Chinese commercial property. With office vacancy rates already around 30 percent in Tier 2 cities, he said, cities all over China are still constructing central business districts.

"Vacancies will remain high in Tier 2 cities, and a lot of supply is coming. This is a concern," he said.

But he played down the significance of problems in the commercial sector for the wider economy, pointing out that 80 percent of real estate investment is in residential property.

On June 1, China Daily reported that the State Council, China's cabinet, had approved economic reform guidelines that include "gradually pushing the reform of tax on holding of properties".

The paper also reported Shanghai municipal spokesman Chen Qiwei, as saying the city is considering a property tax.