China's most recent effort to prop up its softening real estate market is not enough, analysts say, noting that a series of interest rate cuts from the central bank is the best remedy.
"I'm virtually certain we'll see further interest rate cuts and a lot more easing, probably bank reserve requirement ratio (RRR) cuts, in the coming months," Macquarie Asset Management's Senior Portfolio Manager Sam Le Cornu told CNBC. "I think people are underestimating the degree of liquidity that will be put into the market and the number of interest rate cuts."
Chinese homebuyers were given a break on Monday after authorities lowered the threshold of down payments on mortgages for second homes to 40 percent from 60 percent and waived the business tax on the resale of property after two years.
The measures follow Beijing's effort to spur the economy by cutting interest rates twice since November and lowering the reserve requirements of major banks. But that isn't enough for many investors who continue to call for further easing.
"[China still needs] further across-board monetary policy easing," Nomura's China economics team said in a note on Monday. It expects "more policy easing, with three more interest rate cuts and three more reserve requirement ratio cuts over the remainder of 2015."
However, Nomura believes that Mondays' move will "see the pace of property market correction stabilizing in the second half of the year."
Crunching real estate
Monday's move comes amid growing concerns over slowing economic growth.
China set its 2015 growth target "at around 7 percent" in early March – it's lowest target in 11 years – after posting its slowest annual growth rate in 24 years in 2014.
The housing sector accounts for around 15 percent of China's economy, and recent housing data suggests that growth continues to slow.