BEIJING, Dec. 2  -- Largely due to city-specific policies taken to clamp down on speculative housing demand, China's homebuilders are expected to see waning sales in 2017, ratings agency Fitch said in a report Friday.

China's housing sales in terms of gross floor area were forecast to decline by 17 percent in 2017, following robust growth this year, Fitch said.

The ratings agency also predicted a low-single-digit rise in average housing sales prices next year, adding that "this reversal will be due mainly to slowing sales in most Tier 2 cities".

Fitch expected the market imbalance to persist as destocking pressure should remain intense in weak Tier 2 and Tier 3 cities.

"Tier 1 cities, in contrast, are likely to face continued constraint on supply, which has been quickly absorbed by buoyant demand in the last two years," the report said.

Fitch expects Tier 1 city governments to maintain their tight grip on policies to suppress investment demand.

The report was released after several measures were taken to rein in speculative housing purchases, check asset bubble risks and stabilize the market, with dozens of Chinese cities modifying market rules, including higher deposits and more restrictions.