CRIC figures for April show the area of property sold in Beijing and Guangzhou plummeted an annual 46 percent and 40 percent respectively, while Shanghai and Shenzhen down 29 percent and 26 percent respectively.
At land auctions, an important source of funds for debt-strapped local governments, the construction area sold dropped 83 percent, while the total sold value declined 10 percent.
"We think a more persistent and sharper downturn in the property sector is the biggest risk for China's economy in the next couple of years," said UBS economist Tao Wang in a report.
"A big drop in construction activity even without a large price correction would likely have serious negative impact on the industrial complex and, through that, economic growth and bank balance sheets."
UBS said a 10 percentage point drop in construction volume growth would chop 2.5 percentage point off economic growth.
Already some local governments have relaxed curbs on home purchases, and other provinces are expected to follow suit to mitigate the property downturn.
Banks may loosen their lending to property developers later into the year, some market watchers said.
James Macdonald, head of China research for Savills, was looking for investment to pick up around the middle of the year, as he said banks had more capacity to lend to developers early in the year.
"There is still likely to be a contraction in investment for the full year, but by the mid-point of the year the degree of the contraction should be smaller," he said. ***I thought the article was worth the read as it touched on 2 or 3 areas that pertain to XIN - it will be interesting to see if what is said in here some of it is mentioned in the XIN report as they experienced business