China's housing transactions continue to drop

Whether it's more stringent policies or just a bad time for the sector, big cities in China are now feeling the chill in what has been a red-hot property market. Beijing and Shanghai are seeing big declines in the number of units sold, with the capital Beijing even seeing an accompanying dip in transaction prices.

In the capital city of Beijing, average daily transactions of commercial housing dropped 11 percent in February from the previous month.

While in Shanghai, commercial land area sold tumbled 54 percent between January and February. And things are even more dire in Shenzhen, with transaction volumes last month sinking more than 70 percent from January.

Analysts are blaming in part the Spring Festival, traditionally a low season for the property market. While tightening policies by the government are also having their effect. In any case, buyers could be taking a breather after going on a huge house-buying spree last year. But some analysts still believe these are short term factors and are predicting a slow rebound in real estate in March.

Dong Fan, director of Property Research Center, BJ Normal Univ., said, "We are closely watching policy changes in the near term. They will have an impact on both transaction volumes and prices. If there are no new policies on the property market in the short term, I think transactions will begin to pick up in March but at a slower pace."

In some cities, the slide in transaction volumes is being matched by declines in house prices. In Beijing, the average price of new housing fell nearly 6 percent month-on-month in February reversing what had been an earlier upward trend in the city's housing prices.