BEIJING-- Moody's Investors Service expects China's property market to show a slower pace of sales growth in 2017 following tightened regulations to ease an overheated market.

"We expect nationwide contracted sales in 2017 will be largely flat or will see a slight decline from 2016, after buoyant growth that year," Chris Wong, a Moody's analyst, said in a report released Thursday.

China's contracted sales grew by 36.2 percent year on year to a record high of 9.9 trillion yuan ($1.4 trillion) in 2016, driven by growth in both sales volumes and average prices, according to the report.

The growth pace in December, however, slowed from that seen in the first three quarters after the Chinese government implemented tightening measures from late September to cool the sector, Wong said.

Dozens of Chinese cities have announced measures, including purchase limits and tightened mortgage restrictions, to prevent housing prices rising out of control.

These policies have started to pay off. In December, of the 70 major cities monitored by the National Bureau of Statistics, 46 saw their new housing prices climb month on month, down from 55 in November and 62 in October. Meanwhile, 20 cities reported month-on-month price declines, increasing from 11 cities in November and seven cities in October.

Moody's also forecast that low inventory levels in China's first- and second-tier cities will reduce the risk of property price corrections in the next six months.