BEIJING -- Shanghai home prices dropped an average of seven percent last month from October, according to Shanghai Youwin Real Estate Information Service Co Ltd.

The average price in the first 28 days of November was 10,724 yuan (1,453 US dollars) per square meter, compared with October's 11,539 yuan and September's 10,507 yuan, the company said.

Growing transactions in the suburbs and shrinking volume downtown pulled down the average price, said Xue Jianxiong, research head of the company.

Nearly 1.5 million square meters of housing were estimated to have been sold this month, about 10 percent less than October's 1.64 million square meters, the company said.

In downtown Jing'an, Huangpu, Luwan and Hongkou districts, no new properties hit the market in the 28 days, which led to transactions dropping 50 percent inside the Middle Ring Road.

"A rising down payment ratio, exhausted mortgage quotas and stricter checks on land cooled off the property market, but transactions began rebounding at the end of this month (November)," Xue said.

Average housing prices in Shanghai rose 7.9 percent in October from a year earlier, the National Development and Reform Commission said.

The Shanghai government will spend two billion yuan to buy 8,000 low-rent homes for needy people and expand the market supply.

The average housing price in October in the Chinese mainland's 70 major cities jumped 9.5 percent on a yearly basis, compared with September's 8.9-percent growth rate.