Besides declining sales of new homes in Beijing, the sale of previously owned-homes is also sluggish. Even though transactions in July were higher, this part of the market continues to stall.

Yan Wenjian has been a real estate agent for more than three years. He joined the sector in 2008 when the property market was in a downturn. He was then able to witness a significant boom in 2009 and 2010. But now, business is sluggish.

Yan said, "Before I needed to take several groups of clients a day to see houses, but now it’s only one or two groups a day. In fact, now most of the clients just want to rent a home."

Data shows that after Beijing's limit purchasing policy was implemented, only about 300 previously-owned homes are sold each day. That's a 60-percent drop compared to last year. Despite the dip, the price didn't drop much, only falling about two-percent.

A property insider said, "The reaction to the policy from people selling homes was different this time. Under the current purchasing restrictions, many sellers are hesitant, because if they sell their house, they might not be allowed to buy a new one."

Some analysts believe since Beijing rolled out its new detailed property regulations, the housing market has cooled. This is due to the restrictions put on speculative investors. And there is a possibility previously-owned home prices in the city may fall at the end of the year.

A property insider said, "If more tightening measures can be introduced in the second half of the year, there might be a decline in prices."

Insiders added that only 120-thousand previously owned homes have been sold so far this year. That is a three year low. And with an increasing supply of properties, including new homes and subsidized houses, being put on the market, the price of these homes will go down due to shrinking demand.

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