Policies ranging from a property tax to higher downpayment levels and mortgage rates are curtailing transaction volumes in Shanghai, but strong activity at the high end of the market is driving up prices.

In terms of area, the local housing market was sluggish even during the three-day Mid-Autumn Festival this month, a traditional trading peak in previous years.

Statistics from Shanghai-based Uwin Real Estate Research Center show that during the first 11 trading days in September, turnover of new residences in the municipality reached 191,700 square meters, about half the figure during the same period in recent years.

"The turnover of the first 11 days this month dropped 52.34 percent" from last year's 402,100 sq m, said Huang Zhijian, executive director of Uwin Real Estate Research Center in Shanghai.

Purchase restrictions, combined with "already high housing prices, led to the trading ebb", said Lu Qilin, research director at Shanghai Deovolente Realty Co.

However, the low transaction volume didn't hold back prices. From Sept 5 to 11, the average price jumped 12.5 percent week-on-week to a 20-week high.

"What's noteworthy is that active trading in high-end residential projects, which rose 37.68 percent in the same week compared to one week earlier, bolstered the average home price," said Huang.

It's been the same in many major cities, with fewer deals but steady or higher prices.

Since home purchase curbs were imposed, trading volume in Beijing has been low, and the situation won't change much in the coming months, property agent Beijing Homelink Real Estate Co Vice-President Lin Qian was quoted as saying by China Securities Journal.

Lin told the newspaper that this month would be the slowest September for the capital's real estate market in many years.

China's property prices might fall in the next 12 to 18 months as banks curb loans to real estate companies, which could slow development, Hong Kong billionaire developer Vincent Lo told Bloomberg News on Sept 13.

Song Huiyong, director of Shanghai Centaline Property's research and consulting department, said low trade volume in September is virtually certain, but a better performance in October is possible once prices start to ease.