The tightened financial policies since 2010 have also crimped profit margins for many investors in the property sector. At the same time, the realty market is not showing any signs of a rapid pickup. So it is reasonable to see why international investors and even some domestic investors are retreating from the sector.

In the case of direct foreign investors who buy land and then develop the real estate, there are other reasons behind the moves to seek local partners or sell stakes. Foreign investors often have to bolster their real estate investments with funding support, as the industry is not mature enough.

Though some foreign companies have exited the sector, there are many others who are expanding in China.

CapitaLand, the Singapore-based real estate company, launched its Raffles City in Chengdu in September. During the first half of this year, the Singapore-based company committed $2.4 billion worth of new investment, of which 34 percent was focused on China. CapitaLand currently owns more than 120 projects in China with assets totaling 69.5 billion yuan.

Another Singapore-based real estate company, Yanlord Land, which focuses on residential property development, currently holds about 5 million square meters land stock in China and invested 3 billion yuan last year to buy 500,000 sq m of land in Zhuhai.

Despite China's rigorous real estate policies, a number of international property funds are still pouring money into the sector. Property development in first and advanced second-tier cities is still attractive, especially for quality office buildings and commercial buildings.

In many ways, 2012 will be remembered as the beginning of a new era for the Chinese real estate market, a year in which the market took the first steps to becoming more mature and standardized in the long run.

The author is a research manager at the research center of China Real Estate Information Corporation. The views expressed here are not necessarily those of China Daily.