China GDP growth rate is to further slow down to 7.2 percent at year end and expected to hit 6.6 percent in 2015, Credit Suisse estimated in Hong Kong on Monday, adding the country's consolidating real estate sector is stirring prospects.

"The authority may lower its growth target for next year," said Fan Cheuk-wan, Asia Pacific chief investment officer of Credit Suisse AG HK Branch.

"This downturn of the property sector is different from previous rounds. In the past, property market modifications were largely policy-driven. This time, however, it's due to oversupply," Fan said, adding for the past three years, the volume of new property projects in China has surpassed sales volume, which has lead to a dive of both trade volume and home prices in the first half this year. In 70 sizable cities countrywide, 35 recorded an on-month decline in home prices.

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"In this downward cycle, more developers will face cash issues and will have to offer deeper discounts," she said. "Data suggest in the next 10 months, over supply in the property segment will continue. So the government is less likely to ease restrictions on home purchases. Besides, as decreasing prices have been the market consensus, neither would it be easy to woo potential home buyers."

"Real estate-related investments in third and fourth-tier cities are in the vortex," she added. "They represent roughly 60 percent of property investment in China, which in turn, counts for 26 percent of the countyr's fixed asset investment. The property sector consolidation has a direct impact to GDP growth."??

Fan also pointed out that while banks have rolled over various debts by restructuring and extension, large amount of trusts will face maturity at the beginning of next year. "A lot of these trusts are property related. Combined with further slide of the segment, it's hard to be optimistic over China in 2015."

However, Fan denied hard landing concern over the world's second largest economy. "Unless the growth rate retreats to 5 percent, we don't think a hard landing is on the horizon. Given its scale, 6.6 percent means China's economy is on track."

"The recent property market congestion is healthy. In the future, we expect home prices to fluctuate instead of plummet," she added. "Different from their US peers; Chinese residents have a comparatively low leverage rate. In the mid-term, household registry reform and urbanization is to help demand catch up."

Separately, Credit Suisse estimates a regional equity market rally in the third quarter.

"We estimate the Federal Reserve will start to raise interest rates next June. But rates will only climb gently and the global rate environment will keep low. That shall not cast a shadow on the equity market," Fan said.

"This year by far, valuation of Asia equity markets has lagged behind the global level," she added. "We foresee a technical rebound for Chinese stocks in the third quarter, given various data should improve as the economy stands firmer. Meanwhile, continuous recovery of the developed markets will also help boost exports from China."

However, Fan cautioned the trend will not continue in the fourth quarter. "New growth drive has yet to be identified. De-leveraging and structural reform will carry on. Looming default concern will drag market performance by year end. Investors should be conservative and focus on equities with better fundamentals."