The number of residential transactions in Hong Kong fell to it lowest level in four years in December 2012 after the city's government imposed its toughest measures yet to curb home prices.

The number of homes changing hands declined by 53 percent from November to 3,286 last month, the fewest since November 2008, according to Land Registry figures. The value of all home sales was HK$17.2 billion ($2.2 billion), a 59-percent drop from a month earlier.

As deeds may not be lodged with the Land Registry until up to 30 days after the transaction, these figures generally reflected transactions in the previous month. Actual home sales in December could have fallen further, analysts believe.

Hong Kong Chief Executive Leung Chun-ying, who pledged to make housing more affordable during his election campaign, has imposed three rounds of measures to curb home prices since taking over in July.

In its latest round of restrictive measures announced in November 2012, which are considered the toughest ever, the government slapped a 15-percent tax on all corporate and non-local buyers, and raised an existing special stamp duty on short-term transactions to up to 20 percent from 15 percent previously to curb speculative activities.

Despite the restrictive measures, home prices continued to rise, albeit at a slower pace, with the Centa-City Leading Index, which track the prices of secondary homes, rising to 115.18 in the week ended December 28 - up 0.11 percent from a month ago.

Hong Kong - the world's most expensive place to buy an apartment - faces the risk of an "abrupt correction" in property prices, the International Monetary Fund said last year.

The city's home prices have doubled in the past four years on near record-low mortgage rates, an influx of buyers from the mainland and a lack of new housing supply.

Bloomberg - China Daily

(HK Edition 01/04/2013 page2)