The average housing price in China will drop by 5.3 percent year-on-year to 5,024.4 yuan (794.4 U.S. dollars) per square meter in 2012, the Center for Forecasting Science of the Chinese Academy of Science said in a report on Tuesday.
"Though some long-term factors, including increasing household income, rapid urbanization and rising land price, are likely to support the home price, market demand and policy controls will combine to further drag down the price," said Dong Jichang, a professor with the center.
He said the central government is not likely to loosen grips on the real estate market and the implementation of property tax will help to suppress speculation in the market.
The report said about 1.21 billion square meters of commercial houses are expected to be sold this year, up 3.2 percent from a year earlier.
The center also predicted that investment in the real estate market will increase by 21.1 percent year-on-year to 7.68 trillion yuan in 2012.
Investment in China's property sector rose 27.9 percent in 2011 from a year earlier to 6.17 trillion yuan, official data showed.