Home prices in China will fall this year as developers cut prices to meet sales targets amid a cooling property market, according to Standard & Poor’s. The firm reports that property prices will slump by 5% this year compared with an 11.5% gain in 2013.

However, sales volume are expected to improve in the second half of this year and rise 10% for the full year, boosted by price cuts, according to the report.

‘Prices are likely to continue to slide because of large inventory in some markets,’ a Hong Kong-based analyst wrote in the report. ‘Many small unrated developers will feel the heat the most because their sales and financing capacities are substantially weaker than their larger peers.’

Some lower-tier cities with limited demand and abundant supply could see deeper downward price adjustments. After four years of government restrictions to cool the housing market, home sales and property construction are falling and have started to slowdown the Chinese economy, which recorded its slowest growth in six quarters in the first three months of this year.