The leading retail markets are Shanghai, Beijing, Guangzhou and Shenzhen. And practically neck and neck for fifth place are Tianjin, Hangzhou, Chengdu, Nanjing, Wuhan and Shenyang.

To rein in its heated markets, the Peoples Republic of China earlier this year imposed credit-tightening restrictions to combat inflation, bring markets into more sustainable growth patterns and continue its rise on the world stage after generations of standing in the shadows of the US and Europe. After six months of its initial rebalancing act, the effects are now being seen, with residential prices declining for the first time in 18 months, according to a new RICS global real estate report.

The drop in residential prices is particularly important because the "aspiration is for everyone to own their own homes," Brooke said. The run-up of two years ago had fueled concern that PRC's general population was being priced out of the market.

RICS chief economist Simon Rubinshohn says banter about the downside risk to growth could "pave the way for an easing in credit restrictions in the second half of the year should inflation continue to moderate."

CBRE supports Rubinshohn's prediction, saying inflation will ease before this year ends or 2009. The government's challenge for the rest of this year will be to prevent the fast-growing economy from becoming overheated and structural price rises from turning into "significant inflation," the CBRE team concludes.

Brooke predicted the PRC credit-tightening will lead to more alliances or joint ventures with foreign investors, who operate under to stringent rules in order to buy into the country. "It has become more challenging to buy assets on shore, but there are deals being done," he said. The government is doling out 100 approvals each month.

Real Capital Analytics' research team, also pumping out a global markets report in recent days, found China accounted for 44% of global land sales through June 30. The bulk of the deals were in first and second-tier cities. The new data, though, shows a 50% decline from the country's second-quarter 2007 peak.

"Tighter financing policies and tougher new land-holding regulations released at the beginning of 2008 by the Chinese government quickly and effectively dampened speculation and the too-rapid growth of the Chinese land market," RCA's team concluded.

To put China's cities into perspective, the far northern city of Changchun has 30 million people or 10 million more than Australia, home to Greg Penn, senior managing director of investment properties for Greater China. And it's regions like that with lower land costs and more profitable pricing capturing the attention of opportunistic capital, he said.

"There is a deep pool of opportunistic capital looking at the PRC," Penn emphasized. And, it far outweighs the amount of core-plus capital focused on retail and office acquisitions in Tier 1 cities.

The softening market, though, has cut into investment returns, Penn admitted. What was once 25% to 35% has dipped to 16% to 25%, a drawing card for investment on any continent.

"There are many opportunities across many sectors," Brooke said. "The underlying fundamentals of real estate demand do remain very strong."