The annual Shanghai Spring Real Estate Fair, a traditional indicator of the city's housing market, kicked off on Thursday. Coming amid the harsh housing policies, the fair shrank drastically with fewer exhibition booths and housing projects.

This year, the exhibition area is 20,000 square meters (sq m), and about 250 exhibitors have set up booths to promote their projects.

Liang Jie, manager of the fair organization, said this year's housing fair is different to the usual event in that only one- third of exhibitors are promoting projects within Shanghai, more than one-third are nationwide projects, and the rest are overseas property projects.

"Foreign properties are one of the highlights of this year's exhibition, as almost 100 projects developed by 50 developers from 13 countries showed up in our event," said Liang.

Compared with the unfamiliar property developers and overseas projects, big-name domestic developers are absent from this year's fair, including heavyweights such as China Vanke Co and Poly Real Estate Group Co Ltd.

"The major players' absence suggests they have no confidence in the recovery of the market in the next two months," said Lu Qilin, research director from Shanghai Deovolente Realty, a Shanghai-based real estate agency.

Usually, the four-day fair is an important platform for property developers to showcase their new projects after a low season of Spring Festival holidays. But this year is different as it follows the launch of property tax and stricter housing policies that have affected the city's housing market, added Lu.

Also, the outstanding performance of domestic property developers in the capital market in 2010 guaranteed them a strong capital flow, so they don't have to rush to undercut for big sales, Lu noted.

Standing in the Shanghai Spring Real Estate Fair hall abuzz with the inquiries from home-buyers and the canvassing of property developers, 30-year-old Chen Hao looked a bit out of place. Chen works for a German enterprise in Shanghai, and he is ready to marry his college classmate. A house is the only hurdle for the marriage.

"I don't think the property developers are sincere in selling houses to real buyers, but they like to please speculators," said Chen. "The properties are either located in remote areas of Shanghai, or just out of the county border," he said.

Chen and his fiance currently live in a rented apartment in Pudong. "We want to buy an apartment of our own, with convenient public transport facilities near the middle ring. Apparently, this year's fair is not designed for people like us," he told China Daily.

Although there is no visible decline in home prices, speculation in the city's property market has been contained, as transactions have fallen sharply in both the new and second-hand markets.

Statistics from Century 21 China Real Estate in Shanghai, a housing consultancy firm, show that in February, a total of 7,900 units of second-hand apartments were sold, a decline of 62.3 percent month-on-month.

Recently, an online survey jointly conducted by Sina.com and the Oriental Morning Post showed that 51 percent of netizens believe house prices may fall, and 41.2 percent of them feel that now is not a good time to buy a house.

About 172,000 sq m of newly built houses were transacted in February, the lowest since the foundation of the online Shanghai Real Estate Trading Center in May 2004. The average price of the houses dropped 8.8 percent month-on-month to 20,946 yuan ($3,188) per sq m during the same time.

"The fall in transactions for high-end residential properties also contributed to the price decline," said Xue Jianxiong, a senior analyst from China Real Estate Information Corporation, a leading real estate service provider in China.