China will likely loosen restrictions on the property market in the third quarter of next year, as plummeting prices could slow economic growth, according to a university report.

Property prices, sales and investment will fall in the first quarter of next year because of the tightening measures, according to a report by the Beijing-based Renmin University of China released on Saturday.

The university said that the possibility of a market collapse was slim.

A 20-percent fall in housing prices would force the government to adjust its policies, as a steeper decline would push economic growth below 9 percent next year, the report said.

The report predicted that the policy shift would probably occur in the third quarter of 2012. The central government will relax credit for the property market and loosen limits on home purchases, the report said.

The price correction will not trigger systemic risks, massive sales or an economic "hard landing" in China, the report said.

Since April 2010, China has imposed a raft of measures to curb property prices. The measures include higher down payments, limits on the number of residences that people can own, the introduction of a property tax in some cities and the construction of low-income housing.

Government data released on Friday showed that 34 major cities, out of a statistical pool of 70, recorded declines in new home prices in October, compared with 17 in September.

Prices in four major cities (Beijing, Shanghai, Guangzhou and Shenzhen) fell month-on-month, after staying unchanged for three months.

The report said that local governments might start reversing curbs in the second quarter of next year due to their heavy reliance on land sales for fiscal revenue.

During a visit to Russia earlier this month, Premier Wen Jiabao reiterated that the government would not waver on its tightening measures, and he pledged to bring prices down to a reasonable level.

The report also forecast that economic growth would slow to 9.2 percent in 2012, compared with an estimated 9.4 percent this year.