"Already there have been signs of a slackening in several southern cities. Prices for new homes in Shenzhen, a boomtown of nine million that borders Hong Kong, dropped 8% from September to the end of the year, according to global real estate advisers DTZ. In nearby Guangzhou -- China's third-largest city behind Beijing and Shanghai -- new-home prices fell 9.9% in November from October, according to city government statistics. Yet many brokers and analysts are reluctant to draw too many conclusions from the downturn in the south. They point to the tides of middle-class Chinese who continue to pour into big cities looking to buy a first home. "Fundamental demand in China across the board is very strong and will remain that way for the next 10 years," says Alan Chiang, the Shenzhen-based head of mainland China residential property at DTZ.

The real-estate boom has extended beyond Beijing and Shanghai, China's main population centers, to second-tier cities like Chengdu in the west, Hangzhou and coastal Qingdao and Dalian, experts say. As multinational companies push into less built-up parts of China they are bringing along expat employees who have helped feed property growth there, too."

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