The recent curbing policies are giving the wild real estate market in China the chills.

Starting last week, rumors were spreading about Sino-Ocean Real Estate Company abandoning a prime land project in the Wangjing area of Beijing.

The company had won the project on March 15 earlier this year, after 84 rounds of fierce bidding and an offer of 4.08 billion yuan (US$597 million), equivalent to a floor price of 27,500 yuan per square meter (US$4,000), the highest floor price per square meter so far.

However, the recent harsh measures to contain the soaring housing prices in major Chinese cities have dimmed the prospects of realtors. Starting last week, the second-hand house transaction volume shrank remarkably.

"The rumor is also affecting the nearby proprietors' expectations," said Zhang Yue, an analyst with Homelink. Zhang noted that the bidding king's future directly influences the adjacent second-hand housing prices.

The market responded promptly to the rumors. Housing prices near the prime land project dipped 10 percent, and a 1-million price reduction for some houses still failed to attract buyers.

"Spreading the rumor may be realtors' sales strategy," a real estate agent said.

Deputy Manager of Sino-Ocean Beijing Company Zhang Senlin said, "Quitting the project isn't impossible," although he declined to elaborate.

At the annual board meeting on May 13, company chairman Li Ming said he had no plans to abandon the project. Furthermore, Sino-Ocean has already paid the land transfer money and is taking steps to further the project along.

"Quitting or not largely depends on market expectations," said Chen Yunfeng, general secretary of China Real Estate Alliance.

If Sino-Ocean actually abandons the project in Wangjing, the 500 million (US$73.21 million) yuan premium will be frozen. This will also affect the company's standing in Beijing.

Housing prices in this project must reach 45,000 yuan per square meter (US$6,590) in order to create a 10 percent profit for the company. But regarding the far lower second-hand housing prices, the figure isn't seen as within reach.

The recent property curbing policies are starting to be effective. They are scaring off developers with dimmed prospects and tight profit margins.

When Sino-Ocean first won the project and became the bidding king, both the central and Beijing municipal governments introduced severe measures that month to contain the soaring housing prices. This forced the market into a downward path. At the same time, the "one family one new house" policy is giving a precision strike to the speculators.

"Bidding kings no longer dominate the market," Zhang said. The shrinking demand is inevitably leading the market into a buyer's one.