Speculators and homebuyers at the city’s biggest annual property fair last week lamented a slump in demand as the market came to a halt after the ousting of Shanghai’s party chief, Chen Liangyu, on charges of corruption.

Chen had defied orders from the leadership in Beijing to impose taxes and regulations to curb the soaring price of houses and apartments in Shanghai, China’s commercial capital, which has become a magnet for foreign investors.

“He got so angry with Wen Jiabao (the prime minister) that he banged the table with his fist and shouted, ‘You will be responsible for trouble in my city!’,” a local official told reporters last week.

The party’s feared disciplinary apparatus soon went to work and officials have been sent documents alleging that Chen, 60, kept at least 10 mistresses, among other alleged deviations.

President Hu Jintao, an ally of the premier, seized the opportunity to defeat the so-called “Shanghai faction”, which had enjoyed the favour of his predecessor, Jiang Zemin.

It is thought Hu may make further moves at a party meeting this week to unseat his rivals and install new leaders.

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