China's property prices are likely to decline by almost 20 percent next year, and the market may go through a major period of adjustment in March or April 2011. That's according to a report by Beijing-based Renmin University of China.

The report also says prices will be dragged down by the government's measures to cool the property market, which have placed constraints on developers, as well as by an adjustment in the country's monetary policy.

The capital available to developers is forecast to contract sharply in the first quarter of next year. The situation is likely to be exacerbated by tighter financing, loan repayments being due and stricter restrictions on property buyers.

But the reports ruled out a steep correction in the country's property market, saying the tight financial situation will not cause a steep plunge in prices, and the market is expected to make a soft landing.