Speculation that the Chinese government will implement further measures to cool the country's bubbly property market has sent stocks of major Chinese developers tumbling in recent weeks. But analysts tell CNBC this provides investors an opportunity to hunt for bargains.
China's cabinet on Wednesday restated intentions to extend a pilot property-tax program to more cities and urged local authorities again to put price-control targets on new homes, in a fresh bid to calm frothy real estate markets.
That spooked investors and triggered a sharp fall in property stocks on Thursday. China's property stocks have suffered their largest drop in more than six months with some of the biggest losers being the Hong Kong listed Poly Property Group, which has fallen 8 .3 percent in value year to date and Country Garden Holdings, which has lost 4.19 percent.
According to Tim Gibson, head of Asia-Pacific property equities at Henderson Global Investors, the time is now ripe to buy into this sector.
"Our view is that the pullback that we have seen represents the bad news being priced in. Investors tend to react then ask questions later and in this case they were reacting to policy risk, which has now been reduced. The stocks are cheaper than they were at the start of the year but the fundamentals remain the same," added Gibson.
In the past week, he has been adding to Chinese property stocks on weakness, increasing overall China exposure in the Henderson Asia-Pacific Property Equities fund, going from neutral to overweight.