Last year‍, Shanghai issued several restrictions on buyers and developers in order to curb the housing bubble. The tightening policies have included higher down payments and tougher scrutiny of the capital source of property developers.

Due to the purchasing restrictions, Centaline Property, a real estate agency that specializes in high-end apartments in downtown Shanghai, has sold only six apartments since the Chinese New Year holiday, less than half the figure of the same period last year.

Senior Analyst at Centaline Property Lu Wenxi considers the balance between supply and demand as the most important factor in price movements.

“For example, if the supply is less than the demand in the market, the housing price will go up. If the supply is enough, but there are not many people buying houses, then the property price will go down,” Lu explains.

Li Mu, General Director of Colliers International, says the cooling policies will stabilize the housing markets and freeze the housing bubble genteelly, but not stop the housing prices either.

“Cooling down of housing markets does not mean the sharp down shift of housing price,” Li tells CGTN.

As to the effect of policies, Li is optimistic. Li points out that the market expectations have been stabilized and the housing prices have been crashed into the stable level, which means the housing tightening policy takes effect.

As the government has relaxed its one child policy, Li is quite positive that the housing demand will boost with larger family sizes.

“The family has demanded to increase their house sizes, and also improve the house conditions; and coming to age of schooling, the demand of houses near the schools will increase; and when coming to age of marriage, the demand for house will certainly increase,” Li analyzes.

“Although the decline rate is modest, it is very clear that the direction of the future prices is clearer,” Li says.