Two years ago, Zhang Kai put down US$66,716 on his dream house in Beijing's Tongzhou district. It was scheduled to be completed in June 2008.

Zhang was disappointed, but not surprised, when the completion date was pushed back to the end of 2008.

Now he's starting to worry. The completion date has been pushed back again, to September 2009, and Zhang says he doubts the developer has the money to finish the project.

Welcome to China's real estate market, 2009 edition.

Prices have started to moderate, but there is a glut of houses on the market. Developers are short of cash and willing to deal, but not enough to suit consumers, who are waiting for even bigger price cuts.

Everyone is concerned about the real estate industry, from Zhang Kai to the National People's Congress. Despite the current problems, however, no one expects a US-style meltdown.

After years of skyrocketing prices, China's housing market seems to have reached a breaking point.

Nationally, housing prices in 70 major cities declined 0.4 percent in February, compared to the previous month, and 1.8 percent compared to a year ago.

Units at the Thomson Riviera, considered one of the most expensive housing complexes in Shanghai, went on sale in 2005 for US$16,080 per sq m. To date, only four have been sold, and the developer is rumored to be offering sharp discounts.

China Vanke, the nation's largest housing developer, began cutting prices around Spring Festival, causing competitors Greenland, Poly, and Kerry Properties to follow suit.

Vanke's sales dropped by 8.6 percent last year, to $7 billion, while its assets decreased by US$185 million. The company expects to reduce its asking price for unsold units in 13 projects by US$179.8 million.

This year, Vanke's sales rose by 19 percent in January and 150 percent in February, compared with a year ago. Sales by Poly Real Estate Group Co, the nation's second largest developer, tripled in February.