The second round of government measures cool housing prices had some effect in October. Following the recent interest rate hike, it seems the property market has entered a more restrained phase.

In October, the sales volume of new homes in Beijing slumped. Developers are now facing heavy liquidity pressures. The number of new homes sold last month dropped 62 percent, compared to September. Many new development projects saw no transactions at all.

Home to one of the world's most active real estate markets, Beijing authorities have implemented a series of regulations limiting purchases of property. And these measures are weighing heavily not only on new home developers, but also on real estate agents.

Li Wenjie, General Manager of Centaline Property, North China said "I think the property market in 2010 showed the biggest volatility in 17 years. I've heard someone say this year's property measures are the strictest in history. And I believe it's true."

According to a recent Sina.com survey, 36 percent of interviewees believe property prices will keep going up. Another 32 percent think there won't be a significant drop in prices.

But most respondents have one thing in common: they won't buy until they understand the market.

Ren Zhiqiang, CEO of Huayuan Real Estate said "Sales in most of major cities are slumping at an average over 40 percent. Some have even dropped as much as 70 percent."

In general, the new measures have been effective in cooling down the over-heated property market. But there's still demand from owner-occupiers, rather than market speculators.