Investors already in the market will take some comfort from a report recently released by ratings' agency Moody's, which states that the outlook for the industry 'remains strong, driven by massive ongoing urbanisation and likely continuing medium-term price growth, due in turn to rising GDP and personal consumption power'.

Additional price support was provided by the influx of foreign capital and the emergence of a mortgage lending market, Moody's added.

But investors would be advised not to become complacent about investing in Chinese property, which faced 'numerous challenges', cautioned Moody's.

'There is a high level of government intervention and rapid growth. The market is highly fragmented. No single player commands a significant share nationally,' it said.

Furthermore, during the past five years, competition had intensified as international developers aggressively entered the market, and accordingly, not all companies would prove successful.

Identifying the success stories would require detailed analyses of individual entities, said Moody's, which advised investors to consider a check list before proceeding. 'A high level of regulatory uncertainty affects the cost of doing business and market sentiment, contributing in turn to a volatile business environment,' Moody's warned, adding that policy missteps could lead to near-term corrections in major cities.

Key factors when considering Chinese property developers:

Ongoing regulatory uncertainty contributing to a volatile operating environment

Large existing, diversified land banks and operations help mitigate volatility

Rapid growth poses execution risks; as such, management quality remains a key determinant

Low leverage and strong liquidity are crucial for weathering inevitable volatility

Source: Moody's