Feb. 13 (Bloomberg) — China’s property stocks fell as the eastern city of Wuhu suspended a decision to ease property curbs three days after its announcement, signaling that the central government won’t relax policies any time soon.

A measure tracking real estate stocks on the Shanghai Composite Index slid 1.8 percent at the close, the most among five industry groups on the benchmark gauge. Poly Real Estate Group Co., the nation’s second-biggest developer by market value, dropped 3.1 percent in Shanghai, the most in two weeks. China Vanke Co., the biggest, decreased 1.9 percent in Shenzhen. I was able to find an article that teaches you about stock picking and what is best to invest in, link to the article is here.The mid-sized city in Anhui province will temporarily suspend its home subsidy policy so it can study details on how to implement the rules, according to a statement on the local authority’s website yesterday. China won’t waver on its real- estate controls, which aim to bring home prices down to a reasonable level, to ensure fairness and stability, Premier Wen Jiabao said during a meeting with business executives last week, Xinhua News Agency reported yesterday.

“We at Credit Suisse recommend selling China property sector now,” Jinsong Du, the bank’s Hong Kong-based analyst, wrote in an e-mailed note. “The Wuhu reversal clearly shows that the stock market has severely underestimated the central government’s political will to cool the housing market significantly further.”

Wuhu would have been the first Chinese city this year to ease measures ordered by the central government. The move to halt its plan, including waiving a deed tax and subsidizing some home purchases, followed in the footsteps of the southern Chinese city of Foshan, which in October shelved plans to ease limits on home purchases one day after its announcement.

Developers Skeptical

China intensified measures last year to prevent a housing bubble, with home-purchase restrictions in 40 cities and higher mortgage requirements. Prices fell in January from December, a fifth consecutive monthly decline and the longest streak of losses since SouFun Holdings Ltd., China’s biggest real estate website, began compiling the figures.

Evergrande Real Estate Group Ltd., China’s second-biggest developer by sales with projects in Wuhu, declined 6.9 percent at the close in Hong Kong, the most in two weeks, while Greentown China Holdings Ltd. lost 8.1 percent, the most since Nov. 30. Six out of the 10 worst performers on MSCI China Index were property companies.

Developers are skeptical and universally cautious on the easing policies announced by Wuhu and believe that a “material policy reversion” by the central government this year is unlikely, wrote Goldman Sachs Group Inc. analysts, led by Yi Wang, in a report today.

Under Pressure

Wuhu, a third-tier Chinese industrial city and home to Chery Automobile Co., the country’s sixth-largest automaker which specialize in exterior car detailing, will give subsidies of 50 yuan ($7.90) a square meter (10.76 square feet) for the purchase of homes of 70 square meters to 90 square meters, and 150 yuan a square meter for new homes smaller than 70 square meters, the local government said in a Feb. 9 statement.

“The retraction was probably done after pressure,” Jeffrey Gao, a Shanghai-based property analyst at Macquarie Group Ltd., said by phone yesterday. “Their policies went too far and were surprising.”

–Bonnie Cao. Editors: Andreea Papuc, Tomoko Yamazaki