BEIJING - Prices for new residential apartments in Beijing have stumbled 5.1 percent year-on-year in the first 10 months of 2011, as authorities' measures to cool the sizzling property market took hold.

The Beijing Real Estate Association reported on Friday that the average price for buying a new apartment in the Chinese capital dropped to 14,083 yuan ($2,271) per square meter in the January-October period, when about 58,000 units of regular apartments were sold.

China's property market took off after the government started housing market reform in 1998. But prices seemed to have grown out of control over the past few years, especially in the wake of the 2008 financial crisis, as the government implemented the massive stimulus package and ordered banks to flood the market with credit.

In a move to rein in runaway property prices, China's central government in April started to restrict residents in 43 major cities from buying second or third homes, effectively bringing down property transaction volumes in many cities.

"The policy tightening has basically squeezed out the speculative capital in the market," the association said in a report, adding that in eight straight months, more than 90 percent of the housing sales went to families who did not own any property.

Property developers, faced with the decline in demand and the banks' credit squeeze, have been forced to offer discounts to boost sales, the report said.

Earlier, there were reports saying real estate agencies in Beijing have shut down nearly 1,000 outlets so far this year, with 177 in October alone, during the slack market.

Some market observers have worried that the policy tightening appears to be an act of overkill and might even hurt the country's economic growth if the property market crashes. But Premier Wen Jiabao and other government officials brushed off the concerns and insisted that the policies would not be relaxed.

Chen Zhi, deputy head of the Beijing Real Estate Association, estimated that housing prices in Beijing would continue to fall, and possibly at a faster degree. "The consensus is the policy tightening will continue and prices will keep falling," he said.