The Shanghai Composite Index finished down 1.8 per cent at 2,076.7 points, while the CSI300 of the largest Shanghai and Shenzhen A-shares shed 2.2 per cent. For both, this was their biggest single day loss since January 6.
The Nasdaq-style ChiNext Composite Index of mainly high-tech start ups listed in Shenzhen outperformed, climbing 1.7 per cent to near a record closing high.
The official Shanghai Securities News reported on Monday that Industrial Bank and other banks may have stopped extending loans to property developers and tightened lending to other property-related sectors such as steel, cement and construction.
The Shanghai property sub-index plummeted 5.4 per cent in its biggest single-day loss since June 24 as Poly Real Estate plunged 8.5 per cent.
Average new home prices in China's 70 major cities rose 9.6 per cent in January from a year earlier, easing from the previous month's 9.9 per cent rise, based on data released by the National Bureau of Statistics (NBS) on Monday.