Major property markets in Asia are likely to face a slower second half because of policy risks and an expected increase in housing and office supply, after some developers had a positive first six months. China Overseas & Investment Ltd, the country\'s top listed developer by market value, Hong Kong tycoon Li Ka-shing\'s Cheung Kong (Holdings) Ltd and Singapore\'s CapitaLand Ltd, southeast Asia\'s biggest developer, all benefited from strong housing prices in their key markets earlier this year. RELATED NEWSâ– Naina Lal Kidwai appointed to HSBC\'s Asia-Pac board However, Chinese government moves to cool its red-hot property market by raising mortgage rates and down payments for second and third homes, restricting lending and building affordable housing will likely damp sentiment in the sector. The Hong Kong and Singapore governments are also wary of asset bubbles, although moves so far have been muted compared with China. Hong Kong raised the stamp duty on purchases of luxury apartments, while Singapore slapped a new stamp duty on homes sold within a year of purchase and set a cap on loans. \"Every market is a little different in the coming six months,\" said Nicole Wong, regional head of property research at CLSA. \"Some markets might have policy risks and that would be for Singapore and a little bit from Hong Kong. And there will be some markets where policy risks have peaked in our view, like China.\" In China, harsh policies announced in mid-April have caused transaction volume in some cities to plummet. The government also plans to roll out more affordable housing as, increasingly, more Chinese are complaining that they are priced out of the market. \"The main uncertainties are policy risks that are starting to unfold in China, and especially as inventory starts to build up, you should see price cuts emerge in September, October,\" said UBS head of Asia real estate research Eric Wong. A third of China\'s developers, such as China Vanke Co Ltd and Evergrande Real Estate Group Ltd, have reduced prices, and more are likely to do so in the second half, which is expected to affect their bottom lines, analysts said. First-half operating profit at China Overseas rose 48 percent to HK$7.98 billion in the first half, with analysts polled by Thomson Reuters I/B/E/S expecting HK$14.75 billion, up 20% annually and indicating an easing second half. In other markets, Japan\'s top developers Mitsui Fudosan Co Ltd and Mitsubishi Estate Co Ltd face an office space oversupply and lower rental revenue in the second half. Japan was the world\'s second-biggest property market but was set to be overtaken by China in 2011, real estate services company DTZ said earlier this year. In Australia and India, rising interest rates might damp buying sentiment for the rest of the year. The bright spots are likely to be some emerging markets, such as Thailand, where the government has been helping to support the markets as internal political strife impacted its economy. The property sub-indexes in Thailand and the Philippines have been outperforming their broader stock markets. Ayala Land Inc, the Philippines\' largest property company, said second-quarter net income was up by more than a third. Thai Land & Houses PCL, Thailand\'s top home builder, said it expects revenue to grow by 15% this year, better than analysts forecasts, despite a weak second quarter. CLSA had a preference for stocks of Thai developers and Singapore REITs (real estate investment trusts), Wong said, but declined to identify any picks.