Home prices in China will likely see slight decreases rather than notable drops this year amid relatively contracted sales as the domestic housing market continues its correction, according to a real estate blue paper released yesterday by the Chinese Academy of Social Sciences.

An overall slack momentum will prevail in the country's property market with home prices extending a downward trend through the rest of the year, but no significant drops are likely, the annual paper forecast.

A wait-and-see sentiment among real estate developers is expected to dominate the market as the majority of the builders still feel unwilling to offer price cuts mainly due to their high property development costs, or expensive prices paid for the land in particular. A cautious attitude will remain the mainstream in the market until clearer signs on the economy as well as government policies show up, the paper said.

Purchases of new homes, excluding government-funded affordable housing, will remain flat. Affordable housing, meanwhile, will be released at an accelerated pace, a result of extensive construction conducted around the country over the past few years.

The overall profit-making capability by the real estate industry will continue to fall this year with small and medium-sized players more prone to bigger losses and higher risks of bankruptcies, the academy said.