Sales of new apartments in Shanghai fell by 20% last month, partly because a pension fund scandal damaged confidence.

Developers sold new apartments totalling 1m sqm in Shanghai in October, compared with 1.25m sqm sold in September, according to statistics from the Shanghai Real Estate Exchange.

Wayne Zane of Colliers International in Shanghai said: "Instability of the citys management hurts investors confidence in the property market."

He added: "Property prices will continue to decline as a result of market adjustment."

China s central government continues to tighten controls on property investment and price increases to prevent the worlds fastest-growing major economy from overheating.