Sales of new homes in Shanghai in the first seven months this year were 48 percent lower than the same period of last year after government policies to curb property speculation took effect.

Sales by the end of July stood at 9.11 million square meters, the Shanghai Statistics Bureau said.

Sales including commercial property and residential property were 11.04 million square meters in the seven months, down 42.1 percent.

In the first six months, the city's new home sales dropped 41.8 percent year on year to 8.41 million square meters, and the further dip in July suggests the market still remains uncertain amid concern of further measures to curb prices.

In mid-April, the State Council, China's cabinet, raised the down-payment requirement for second-home mortgages to at least 50 percent from 40 percent to curb speculation in the property market.

Banks were also told to suspend loans to buyers of third or more homes.

Meanwhile, most real estate developers are still reluctant to cut prices while a wait-and-see attitude prevails among potential home buyers.

New homes completed during the period dropped 33.6 percent to 5.51 million square meters.

Investment in real estate development jumped 34.9 percent from a year ago to 105 billion yuan (US$15.4 billion), or 39.5 percent of the city's total investment in fixed assets, as projects approved last year began development in the first half and the investment in low-budget houses accelerated. Shanghai's construction costs for low-budget homes in the first half surged 120 percent from a year ago to 14.1 billion yuan.

The National Bureau of Statistics said earlier this month that average prices for residential property in 70 major cities around the country rose 10.3 percent year on year in July, down from the 11.4 percent growth in June, the third consecutive month to see a drop.

The value of property sales in July in the country fell 19.3 percent from a year earlier to 306.6 billion yuan.

"New home sales might rebound in the second half as more real estate developers may decide to offer price discounts to replenish capital," Shanghai Uwin Real Estate Information Service Co said.