(Agencies)
Updated: 2008-01-21 13:37

SHANGHAI - After booming in recent years, China's real estate market is finally beginning to feel the pinch from sagging demand and tighter controls.

A worker walks past the construction site of a residential building in Beijing Friday Jan. 18, 2008. [Agencies]

One of China's biggest real estate agencies, Chuanghui Real Estate, has shuttered dozens of outlets in Shanghai and other cities, leaving behind angry customers and employees, following an ill-timed expansion just as the market was peaking.

Several other agencies around the country also have closed down or scaled back.

So far, the retrenchment appears to be mainly limited to property brokers - the businesses first to feel the pinch when people stop buying new homes, for whatever the reason. But the moves could herald the beginning of a broader slowdown in one of Asia's hottest real estate markets.

The government has been wrestling to get control of the property sector, worried that rising prices for housing are pushing poorer Chinese out of the market at a time when overall inflation is surging.

Regulators stepped up curbs on the property market last year, alarmed that "bubbles" in property prices could collapse and trigger a financial crisis.

Those efforts are starting to take effect. While urban housing prices in December rose 10.5 percent from a year earlier, a sharp slowdown in sales transactions in recent weeks suggests a new trend.

In the first week of 2008, home sales in Beijing fell 20 percent compared with the previous week, the newspaper China Securities News reported. Sales were off 38 percent in Shenzhen and 52 percent in east China's Nanjing, it said.

"At the peak, the sales volume was several hundred, even a thousand a day," said a salesman for property broker Centaline China in the southern city of Shenzhen, who gave only his surname, Wang. "Nowadays, volume is very low, with only a couple of apartments changing hands each day."

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