Housing prices in shanghai has shown signs of decline, with some luxury apartments in the city center seeing a cut in prices while potential buyers remain uncertain on the timings of making a purchase.

Many potential buyers in Shanghai are waiting for a price plunge following the drop in

Shenzhen housing prices, which declined by nearly 30 percent in the first half. Statistics from China Real Estate Index Academy showed that the housing sales in Shanghai in the first half dropped 27.6 percent from last year to 8.85 million sq m while housing prices rose a slight 7.26 percent.

Hu Yinghua, a researcher at China Real Estate Index Academy, said that Shanghai's real estate market was entering a mild correction period while the government was striving to keep the property price stable without large fluctuations.

Chen Wei, senior director of residential project marketing services at CB Richard Ellis told China Daily that the Shanghai property market was expected to receive a correction by around 10 percent in the second half, beginning with a price drop.

"It also depends on when the real estate developers are willing to lower the price," said Chen.

Meanwhile, many real estate developers are taking firm stances not to lower the housing price, despite the shrinking sales, which will eat into their profits and are likely to cause corporate capital liquidity problems.

A source in a Shanghai-based real estate developer told China Daily that many property developers are planning to keep the price at the current level through the third quarter, as they believe there will be a sales recovery after this period. "If the sales still thin after the third quarter, the housing price will probably decline," the source said.

Market insiders said that the price is expected to fall because of the large supply in the second half. "The increasing supply of apartments in suburban Shanghai in the second half may lead to the average housing price decline," said Chen at CB Richard Ellis.

For Example, Shanghai Greenland Baoshan Real Estate launched a new housing estate near the outer ring, Lvdi Linghai in Baoshan District on June 27, with the opening price of 7,600 yuan per sq m, around 20 percent lower than the average price of its neighboring buildings.

"But the building prices in the downtown area is expected to remain stable due to the decreasing supply of land available for development," Chen added.

The number of potential buyers that went to look for apartments in Shanghai's real estate agency was cut by two-third starting from mid-June, according to Uwin, the real estate information provider.

Xue Jianxiong, chief analyst at Uwin, said "Shanghai's housing price was expected to go down 10 percent in the third quarter this year because of the large supply and the shrinking demand." There is an expected 6 million sq m of new supply in the second half and there still remains around 1 million sq m of unsold in the first half.