Here's the good news amidst China's property bubble hullabaloo

But there's a stinking bad news too.

According to UBS, a few weeks ago, in the face of strong property sales and rising prices, the State Council announced new property tightening measures. 

Since then, property and related sectors have not done well in the equity market, while anecdotal information suggests even stronger property sales in the physical
market. Meanwhile, fears of a property bubble collapsing in China have resurfaced. What is going on?

Here's more from UBS:

The good news is that the new tightening measures will likely have only limited impact on overall property sales and construction this year.

The bad news is that if the current measures do not work, new rounds of tightening will be rolled out. While the physical market should be supported by the broad-based property recovery and the urbanization push, expectations of policy overhang will be a constant dampener to market sentiment.

In the near term, we are not worried about a property bubble collapsing in China, even though there are clearly some unhealthy elements in the property market.

Over the medium term, the reluctance to change the fundamental underpinnings of the property market, including by introducing a wide-spread property tax, reforming the urban land supply system and adjusting the low interest rates, and the enthusiasm on building more urban property as a means to facilitate urbanization could lead to over-investment and over-supply in the property sector, and consequently, in the industrial complex.