China’s home sales tumbled the most in a year in July, underscoring why policy makers are seeking to address a property slowdown that’s weighing on the economic recovery.

The value of new home sales by the 100 biggest real estate developers fell 33.1% from a year earlier to 350.4 billion yuan ($49 billion), according to preliminary data from China Real Estate Information Corp. The drop was the second in a row, after four months of gains. Sales slid 33.5% month-on-month.

The slump in transactions is a blow to developers who need cash to alleviate a multiyear credit crisis that is showing no sign of easing. Country Garden Holdings Co., which faces $2.9 billion in debt payments for the rest of the year, canceled a share placement overnight, according to IFR.

“The weak sales trend, if continued, will lead to more developers, especially private ones, to default in the near future,” Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities, said before the figures were released.

China’s State Council called on cities to start introducing policies to ensure the healthy development of their property markets, China Central Television reported after a meeting chaired by Premier Li Qiang on Monday.

The Communist Party’s top decision-making body last week pledged to optimize and adjust policies for the property sector. The Politburo also dropped a reference to President Xi Jinping’s mantra that homes are for living in rather than speculation.

Existing policies have so far failed to sustain a housing rebound, putting the government’s 5% annual economic growth target at risk. Home prices have resumed falling while property investment continues to shrink.

Chinese authorities are moving to address developers’ funding strains. In July, regulators extended loan relief for builders to ensure the delivery of homes under construction. The securities watchdog vowed to ensure developers’ funding in both debt and stock markets.