Home prices in first- and second-tier cities will probably rise this year because of relaxed regulatory policies, but if the overall economic situation continues to sour, this may put downward pressure on the real estate market, according to the Blue Book of Real Estate 2016, released on Thursday.

If the country's economic growth continues to decline, home prices will probably start to fall across the board from the second half of 2017, said economists from the Chinese Academy of Social Sciences who compiled the book.

Authors of the CASS book estimate that the real estate market is set to recover this year as the favorable policies continue. Eased macroeconomic policies may further release speculative demand and raise demand for housing, which will result in increases in housing sales and home prices in general.