Property investment is still a major growth driver for the world's second largest economy, official data showed Monday, though economists say its contribution to China's GDP is projected to fall given the government's vow to rein in soaring housing prices.

Investment in property development totaled 1.31 trillion yuan ($211.8 billion) in the first three months, up 19.9 percent from a year ago after adjusting for inflation, driven mainly by fast residential property development, the National Bureau of Statistics (NBS) announced on Monday.

Residential property, which accounts for 68.6 percent of total property development investment, recorded a 69 percent hike in sales value in the first quarter compared with the same period of last year.

Despite strong growth of property sales in March, the growth rate was at least 6 percentage points lower than in the first two months of this year, showing the effect of housing control measures, NBS spokesperson Sheng Laiyun said at a press conference on Monday.

The housing sector contributes about 12 percent of China's GDP growth, and the proportion is expected to decline in the future, Zhang Zhiwei, chief China economist at Nomura Securities, told the Global Times on Monday.

With the tightening policy in place, the cooling effect will be more obvious in the remaining quarters of this year, and newly constructed property projects are already showing signs of a slowdown, Zhang said.

Many property developers are reluctant to start new projects under the country's control measures, which will lead to a tight housing supply and make it more difficult for the country to control prices in the future, said Yang Hong­xu, vice-president of Shanghai-based E-house China R&D Institute.

The total area of newly built properties is down by 2.7 percent compared with the same period last year, and the area for property development fell by 22 percent year-on-year, the NBS data showed.

Property development accounts for 25 to 30 percent of China's fixed-asset investment, and investment will continue to be a major driver of China's economic growth, while reliance on consumption and exports alone would only give China an economic growth of 4 to 5 percent, Liu Ligang, chief China economist with ANZ Banking Group, told the Global Times on Monday.

China's GDP grew by 7.7 percent year-on-year in the first quarter, further slowing from 7.9 percent in the fourth quarter of 2012, the official data showed.

To tame housing prices, the central government launched new housing controls on March 1, emphasizing strict implementation of a 20 percent tax on capital gains from existing home sales.

The new round of control measures spurred panicked property transactions, especially in major cities, before local detailed rules could be worked out, further driving up the housing prices not only for existing homes but also for new residential apartments.