The Chinese government's efforts to curb home prices have been significant. On January 26th, the State Council launched 8 tightening measures to cool down the property sector. With nearly 6 months now gone by, how have developers and buyers reacted to the strict tightening policies? Now let's take a look at how the moves are impacting the real estate trade volume in Zhejiang Province.

When the property sector was at its peak half a year ago, more than 30 real estate agencies were located in this area. But now, most have been shut down, due to sluggish sales. Only about 10 companies remain, and all of them are struggling.

Mrs. Lou is a property agent franchiser. She says her businesses have been bearish, and the last secondhand house she sold was in May. Since then, not even one transaction has been completed.

Lou Shaoying, Zhejiang Province property agent said, "This year's business is not very optimistic. Now we can only break even, and sometimes we even lose money."

Under the strict tightening measures, there have been obvious signs of home sales declining in cities across Zhejiang Province. Figures show the trading volume for secondhand homes in Shangzhou decreased to a five-year low of 7-thousand, during the first half of this year. That's down more than 40 percent compared to the same period in 2010.

Meanwhile, the inventory of houses in Hangzhou exceeds 50-thousand, very close to the city's record high. The huge surplus is placing tremendous capital flow pressure on property developers.

Hu Yanhua, vice sales manager of Zhejiang Dahua Property Company said, "The tightening in financial policies has had an impact on the capital chain of the whole industry."

Figures show that sales for major property developers in Hangzhou, during the first half of this year, is less than 30 percent of the anticipated annual volume.

They're also facing increased financial pressure, due to high inventories, and monetary tightening. Some home developers have to offer bigger promotions and discounts, in an effort to lure more buyers.

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