Property settles in for slower growth

Of the 70 major cities tracked by the National Bureau of Statistics, 66 saw average new home prices decline month-on-month in December. Only one city saw prices rise over the same period, leaving three flat for the month.

Some experts believe prices could soon recover as the market digests the cancellation of earlier purchasing restrictions as well as increases in promotional offerings and preferential lending policies.

Signs of market diversification are also becoming more evident. In first-tier cities, new and secondhand home prices have continued to edge higher, despite continued weakness in second- and third-tier cities.

Demographic pressure offers one explanation for the steady price gains witnessed in China's largest cities. These places continue to act as magnets for migrants, who keep demand high and minimize the need for discounts and price breaks.

Transformations in China's economy will gradually reduce reliance on property investment. Despite the current malaise, the real estate sector should continue to maintain moderate levels of growth over the years to come.