For more than two years China’s housing policy has been dominated by a series of government measures designed to cool a super-charged market and battle rising home prices. Strange things have been happening. Transactions have stalled, and housing prices are falling in cities across the country. For many homeowners this is an unfamiliar trend. Now some local government officials, economists and property industry players are predicting that China’s housing policy is about to change. Property controls will be relaxed. Yet at the same time, the word from central government officials and others is restrictions will continue firmly in place. In a recent speech, Premier Wen Jiabao affirmed that China will not waiver on its real estate controls and remains resolute in its efforts to bring home prices down to a reasonable level to ensure fairness and stability.

In China’s complex regulatory environment, paradoxically, the proponents of regulatory easing and the p