Prices of new homes in China grew last year at the fastest rate since 2011, but moderated enough in December to calm fears of a speculative bubble bursting with disastrous economic consequences.
The price moderation will come as a relief to China's leaders as they wrestle with economic targets for 2017.
Sources have told Reuters that Beijing is prepared to accept a more modest growth target of 6.5 percent this year as leaders tackle a mountain of debt built up over years of heavy official borrowing to fund stimulus campaigns.
China depended heavily on the surging real estate market and government stimulus to drive economic expansion in 2016. Now it is widely expected to report on Friday that it met its annual GDP growth target of 6.5 to 7 percent.
Analysts say two forward-looking figures - household loans and house sales - have been indicative of the cooling trend in the property market.
Average new home prices in 70 major cities rose 12.4 percent in December from a year earlier, compared to November's record 12.6 percent rise, data from the National Bureau of Statistics (NBS) showed.
National monthly growth cooled to 0.3 percent versus 0.6 percent in November, the NBS said. Twelve 12 of 15 markets that had been singled out by authorities as overheating had price falls, a significant increase from November.
China's average home prices are forecast to rise 4.1 percent in 2017, while growth in property investment would rise 5.4 percent, a state-owned newspaper reported earlier this month, citing the Chinese Academy of Social Sciences.
Wednesday's data showed eye-popping price rises in 2016, despite a slowdown in growth late in the year.
Prices in Shenzhen, Shanghai and Beijing prices rose 23.5 percent, 26.5 percent and 25.9 percent from 2015.
In Hefei, a long-time top price-rise performer, average new home prices rose 46.3 percent in 2016, Wednesday's data showed, despite posting a 0.2 price decline on a monthly basis in December.
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