That cracking sound...

...you are hearing from the middle kingdom not your imagination.

14 cities put caps on purchases for residents and on housing loans

GUANGZHOU - Property sales have seen a sharp drop and there's been an increase in the number of cancellations of home orders in Chinese cities that have introduced regulations to limit purchases of property. [Property tycoons suffer decline in their wealth]

Dalian, in Liaoning province, is the latest to join in this move to control the rampant property market. On Tuesday, it suspended second-home purchases for families who are residents, while denying new home loans for migrant families who have not worked in the city for at least one year, said a local official.

At the same time, the amount of deposits for first and second home purchases has been raised.

Thirteen other cities now have similar loan caps and higher down payment to cool down the overheated property market.

In Guangzhou, only 308 apartments were traded online, on Monday, according to the Land Resources and House Management Bureau. This represented a big decrease for a single day.

And the average price was 8,600 yuan ($1,320) a square meter, the first time the price has dropped below 9,000 yuan a square meter in two years.

"The government will stop unreasonable home demand and limit speculation in the property market," housing management bureau officials have explained.

The city's new rules now require buyers to have a household registration, or hukou, and a marriage certificate to purchase an apartment.

Cheng Yun, of Guangdong Centraline Property Co Ltd, said most would-be property buyers have adopted a wait-and-see attitude. Cheng estimated that property prices in Guangzhou will fall at least 10 percent over the next few months.

The restrictions apply to both new and second-hand homes and those below the age of 18 cannot purchase a home by themselves.

Local property agents say that some people who had made a deposit on an apartment have begun to break the agreement because they're worried that prices will fall after the new limits take effect.