Sales in China's property market are set to slow in 2017, due to tightened controls by the government meant to cool down the sector after the market reached record highs in 2016, according to a Moody's Investors Service report.

On a sales value basis, national contracted sales rose by 36.2% year over year to a record 9.9 trillion Chinese yuan in 2016, with increases in both sales volumes and average selling prices.

Following implementation of the cooling measures in November 2016, 46 of China's 70 major cities saw prices jump in December 2016, down from 55 cities in November 2016 and 62 cities in October 2016. In December 2016, 20 cities saw prices fall month over month, increasing from 11 cities in November 2016 and seven cities in October 2016.

Moody's noted that 20 of the rated developers it tracks boosted their collective market share to 22.3% of contracted sales nationwide in 2016 from 20.0% the previous year. The agency expects that its rated developers will continue to increase their market share over the next year due to their strong execution ability, reputable brands and solid financial and liquidity profiles that will position them to benefit from the industry's ongoing consolidation.

The inventory of residential properties, measured by gross floor area available for sale over GFA sold, in the first- and sample second-tier cities that Moody's tracks remained low in 2016, at around eight and six months respectively in December. According to Moody's, these low levels reduce the risk of material property price corrections in these cities in the next six months.

As of Jan. 25, US$1 was equivalent to 6.88 Chinese yuan.