The push by China’s policy makers to rein in the property bubble appears to be getting traction, according to early indicators from the nation’s biggest cities.

Beijing home sales plunged by 41% year-on-year last month while Shanghai’s slumped by 18%, China Real Estate Information Corp. data show, after new purchase restrictions and tightened mortgage lending. Transactions fell 50% in smaller cities.

Now policy makers must balance deflating property prices with safeguarding the expansion. Efforts to curb excessive gains could cut 0.6% from 2017 economic growth, and as much as 1% with aggressive national tightening, according to Morgan Stanley.

Market friction could complicate the situation. Developers and homeowners have been slow to reduce prices while potential buyers are holding off because of sticker shock or hope for discounts. Economists expect the standoff will last through the end of this year before weak sales gradually drag down home prices and start to weigh on investment early next year.

Developers staying on the sidelines have led to supply and transaction shortfalls. Total new property entering the market in October plunged 61% from a year earlier in Beijing, Shanghai, Guangzhou and Shenzhen as developers sharply slowed sales, according to CRIC.