By Li Hongmei

The resale market for housing in Wenzhou was badly hit following the government's second round of cooling measures announced in September 2010, with the city having posted the country's sharpest decline in prices after recording the highest appreciation, China Central Television (CCTV) reports.

A real estate agent in Wenzhou told CCTV that the number of housing transactions has dropped 50% to 60% to only five to six deals being closed every month, and the impact this year has been harsher than the sector expected.

Signs pointing to fire sales have been seen at every property agency in the city.

One realtor said that during the "good old days" between 2009 and 2011, houses were flipped from one agency to another, and their prices would double in a month in the process.

Chen Hong, a senior researcher at Wenzhou University's real estate institute, told CCTV that heated market speculation has led to low occupancy rates in residential projects.

While people investing in the market before 2011 had earned great profits, Chen noted that the government's cooling measures in 2010 and local authorities' subsequent introduction of purchase restrictions led to 29 months of price declines in Wenzhou.

Another agent said that a house, which could be sold for 40,000-50,000 yuan (US$6,595-$8,244) per square meter before, is now worth only 22,000-23,000 yuan (US$3,628-$3,793) per square meter.

Fire sales were rare in 2010 and only took place when an owner had an urgent need for funds. However, they have now become the norm in the city, CCTV said.

Yan Jiahua, president of marketing at Zhongliang Real Estate Group, pointed out that the ratio of transactions for second-hand houses to new houses has dropped from 5.7 in 2010 to 1.4 in 2013.

Realtor Jiang Yi added that Wenzhou is gradually becoming a buyer's market and that housing owners hold less and less power in price negotiations.