Sales of residential property in China will likely improve in the second half of this year, the global ratings agency Moody's Investors Service said on Tuesday.

On a 12-month trailing basis, the total contracted sales value for China's residential property market grew by 4.4 percent year-on-year in June, the slowest pace since November 2012.

"We expect such contracted sales growth will continue to range between 0 percent and 5 percent year-on-year for the rest of this year," said Franco Leung, a Moody's vice-president and senior analyst.

In addition, Moody's expects that mortgage availability will improve in the second half of 2014, while the mortgage approval and disbursement periods will be shortened.

These factors, in addition to a higher number of expected new project launches and an increased willingness by developers to provide price incentives, will likely support sales volume growth in the rest of 2014.

"We will likely see a higher level of differentiation among developers in China under the current tough operating environment," said Leung.

Despite weak contracted sales in the first half, the cumulative contracted sales for Moody's 20 rated developers rose 15.2 percent year-on-year to 574 billion yuan ($93.1 billion) in the same period.

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