On Friday, in its resolution to control its real estate sector China witnessed decline in shares, with analysts expecting further measures to be disclosed later this year if the asset bubble threat continues.

China's banking watchdog promised to resolutely implement rules intended at calming the property sector, a day after the Government increased the mortgage prices and down payment conditions in its most forceful move over the past half a year.

The declarations pulled Hong Kong's property index .HSNP down to a three-week low. China's best developers China Overseas Land observed as much as 6% decline in intraday trading in almost two months, while Vanke fell
2% during trade.

Analysts hope that the Government will offer more reasonable housing in the latter half of this year. They said that Beijing could levy a property tax on a trial basis if that measure fell short to calm the market scenario.

Eva Lee, an Analyst at Macquarie Securities, said, "The impact from the latest announcements will be more on volumes and less so on prices, that's my feeling".

China's property prices mounted a yearly 11.7% in March, said to be the highest since the state statistics agency started issuing monthly reports in July 2005.

However, analysts are of the view that March increase was largely due to an extraordinary low base.

China faces one of the greatest asset bubble risks in Asia and the Government is strong-minded to make sure that the real estate sector, a strong pillar of the world's third biggest economy, develops steadily and doesn't collapse.