The rapid rise in house prices in big Chinese cities may mean a real estate bubble is inflating to bursting point, UBS warned on Tuesday.
"A stronger property rally lasting into 2017 may increase the risk of another major round of downward adjustments thereafter. Investors should closely monitor property sales, new property starts and property investment for near-term upside risk, which may increase the medium-term downside risk," UBS Economist Tao Wang said in a report on Tuesday.
Chinese property sales growth reaccelerated in 2016, increasing by 25 percent year-on-year, year-to-date, according to Wang. Property starts grew 12 percent year-on-year in the same period, after two years of decline.