By David Kirton

SHENZHEN (China) – Jerry Tang left his hometown to start a new life as a Shenzhen real estate agent. Shenzhen is China’s most populated tech city and one of the most coveted property markets in the world.

In a single month, Tang was able to make 50,000 yuan (about $7,800) selling apartments. Last year Tang was earning approximately 15,000 yuan per month. However, this year he is making about 5,000 yuan, mostly from rentals and commissions.

“It’s certainly more difficult this year to sell,” he stated. While buyers are eager to know what the market will do, developers have cash constraints and are slow to pay agents commission.

Shenzhen is home to over 17.6 million people. Some of the smaller brokerage offices were closed. Eight agents representing real estate told Reuters that at least a quarter of their peers have left the business or are considering leaving it.

Lianjia (a large realtor) plans to close down one fifth or more of its Shenzhen offices, according to financial news site Caixin. The report cited an internal memo. Lianjia’s parent company KE Holdings didn’t respond to our requests for comment.

Local authorities have made deliberate efforts to lower apartment prices and reduce turnover. This includes requiring larger down payments and capsizing resale values.

Real estate agents claim it is also because of the crisis in confidence that has hit China’s property sector, which highlights how much the sector’s problems are being felt. Shenzhen, which is the epicenter of China’s rapid economic growth over the last 40 years, may not be immune to the crisis.

China’s real estate market is suffering from unprecedented stress, as some estimates suggest that it accounts for quarter of China’s GDP. This year, policymakers in China introduced debt caps to limit excessive borrowing by developers.

It has also led to liquidity crises for developers such as China Evergrande Group and Kaisa Group Holdings, which are the most indebted in the world. These two companies are also headquartered in Shenzhen. However, policymakers can be expected to remain firm in their support for the reforms that are being deemed necessary.

The October drop in prices for Shenzhen’s new properties was 0.2% compared to a month ago. This is the first fall this year and is in line with national norms. The future of Shenzhen’s property market remains uncertain, though it is possible that they will see more severe, although still modest, drops than those experienced in other Chinese second-tier cities.

The southern tech hub’s economic strength is in its favor. While Shanghai has an economy comparable to that of Shenzhen, Shenzhen’s only third of land means strong apartment demand.

Tang explained that while buyers worry about Evergrande, contagion and other issues in Shenzhen, they also know that there are developers who would be willing to help them finish their projects if necessary.

The tougher curbs, and the subsequent property market chills that followed are an indication that speculative investing – which was once rampant in China because of its limited investment choices – might be ending.

Lisa Li who is in the investment business and just bought a tiny studio apartment, but it was nerve-wracking said that her parents could have closed their eyes and pointed to somewhere where they could invest their money.

She said, “Our generation cannot do that. We’d be in trouble.”

Tang (30) says that this is not warm comfort. However, he said that he was thinking about changing his job.

“I’m trying to save money for a girl, but I need it because I have to support my mom back home.”

($1 = 6.3836 )