More and more buyers are finding it difficult to justify purchasing property in Shanghai.

While many sellers think the market will tolerate almost any price for four walls and a roof, buyers are taking a step back before forking out enormous sums.

But the prospect of further price rises has been thrown into doubt by firm government measures to dampen the speculative fever.

Wang Tao, 33, who moved to Shanghai from Beijing in 2003 with his wife and twin babies, is among those who think buying a property may not be a good idea, especially in the current climate.

In the not too distant past, prices sometimes went up even during negotiations and, since Wang started house hunting two years ago, the cost of an apartment has shot up.

When Wang first moved to Shanghai he looked at a three-bedroom flat near Tongji University, inside the city's inner ring road. The owner originally asked for 8,200 yuan (US$988) per square metre. A few weeks later, the owner raised the price to 8,800 yuan (US$1,060).

"I just felt unbalanced because I knew the owner bought the flat for half the price and then he raised it so much in such a short time," Wang said. "We gave it up and decided to wait a while... We thought prices wouldn't go up much further."

But then, "property prices in Shanghai went crazy."

"I think the price of the flat we bargained for should be at least 12,000 yuan (US$1,446) per square metre now."

In 2003, Shanghai's property market was about to kick into high gear. The government was encouraging buyers with income tax rebates. Foreign companies and high-income white collar workers added to the housing boom while the government sped up relocation in urban areas to facilitate construction of new projects.

But then the speculators stepped in. "In the second half of the year, everybody seemed convinced that investing in housing would undoubtedly pay off," Wang said.

New government policies to curb speculation came into force earlier this week. Wang believes prices will remain stable for a while.