Hu Jinghui, vice-president of Bacic5i5j.com, a property brokerage, said potential buyers' "wait-and-see" sentiment has risen in 2014, while developers and banks are increasingly cautious of the potential risks in China's housing market.

Since the Lunar New Year, it also has become more difficult to get home loans, a development that has caused many to cancel or postpone their purchases.

Banks deny halting home loans

Keeping the lid on housing prices

Major Chinese banks have scrapped favorable policies such as giving discounts on first-time mortgages, and smaller institutions even raised the mortgage rate to 105 percent of the benchmark rate, media reported.

A number of real estate stocks tumbled last Monday on a report that Industrial Bank Co Ltd halted some of its property loans and property developers in Hangzhou cut prices to promote sales, highlighting how jittery public sentiment has become.

But data from Centaline showed that turnover in big cities recovered quickly from the Spring Festival period, a traditional off-season for housing deals. Turnover from Feb 21-27 fell by only 5 percent from the January average recorded in 54 cities. In first-tier cities, Centaline said, turnover even increased.

"We think that under the current macro-regulatory environment, a claim of the 'collapse of the property market' is an exaggeration," said Cheng Yun, an analyst with Centaline Research Center.

"Except for risks in a few cities, the potential demand is still stable, particularly in first-tier cities," Cheng said.

A report from Shenyin & Wanguo Securities said that even if the credit supply posts zero growth this year - a worst-case scenario - overall sales will only drop by 15 percent. The report went on to add that this probably won't happen and sales should grow by 17 percent in 2014.

Pessimism in the market, however, may deter potential buyers and thus weigh on real estate turnover. Centaline said the market is searching for clues in the government's "two sessions"; thus, March data will be a "bellwether" for the property market. But considering pervasive hesitant sentiments, the "bellwether" month could be delayed to April.

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