Real estate has lost its allure as an investment option in Wenzhou, Zhejiang province, since property prices tumbled due to purchasing curbs imposed by the central government.

The average price of residential apartments in Wenzhou has dived by about 24 percent since 2012, according to the latest figures from the city's prices bureau.

In addition, the average price of land has dipped to a five-year low, while the value of some villas has fallen by 50 percent since 2010.

Business people from the city, one of China's wealthiest, are well-known for their speculative activities in various sectors, especially the property market.

China tightened its curbs on the property sector in 2010, when house prices rose far beyond the reach of average wage earners.

"Compared to 2009 and 2010, when prices peaked at 80,000 yuan ($12,700) per square meter for certain luxury apartments, the average price of those is now under 45,000 yuan per square meter," said Ding Yi, a developer of luxury homes in Wenzhou.

As a result of its gloomy property market, Wenzhou suffered the largest drop in housing prices among the 70 monitored small and medium-sized cities in the country in the first two months of 2013, according to the National Bureau of Statistics.

"Demand for new property projects, especially luxury villas, kept declining sharply along with the overall price of housing in the city," said Zheng Jian, a salesman at a property agency in Wenzhou.

In the meantime, some investors have already switched from the residential property market to commercial and industrial properties.

"Although the profits from commercial properties are smaller than the residential ones, and it also will take longer to see the results, the property market is still quite profitable compared to other financial products," said Sun Lianqun, a property investor who owns more than 20 residential apartments and commercial properties in Wenzhou.

Sun added that he planned to buy a piece of industrial land in the suburban area and turn it into a holiday resort as a long-term investment strategy.

Developers of commercial properties, which are not covered by the purchase restrictions, have seen investors snap up more of their properties.

"I choose not to develop residential properties in the city as the fluctuation of prices could be very frequent and risky," said Peng Shangyue, a commercial property developer in Wenzhou.

Peng's focus has been on commercial blocks in superstores or shopping malls in third-tier cities with lower profits and risks than residential properties in bigger cities.

"I think I've made the right choice," said Peng.

yuran@chinadaily.com.cn