HONG KONG -- The second-hand home sales in Hong Kong are picking up slightly recently after an unusually sluggish transaction volume in March, with property owners axing prices to entice home buyers.

The transaction volume of the city's secondary residential properties plunged to around 2,300 in March, the lowest monthly volume in almost 10 years compared with the 2,135 during the SARS outbreak in 2003, according to the data provided by Centaline Property Agency Limited.

Wong Leung-sing, associate director (Research Department) of Centaline Property, told Xinhua that the low transaction volume was mainly due to the tug-of-war between sellers and buyers. "It is nothing to do with the macro economy, but the cooling measures introduced by the Hong Kong Special Administrative Region government."

Home prices in Hong Kong have surpassed the 1997 peak in the last few years because of the imbalance between supply and demand, the ultra-low interest rate and the surge of capital inflows.

The city's government has implemented rounds of measures to cool the buoyant market, and the latest curbs include higher taxes and tighter mortgage requirements on specialized transactions, making the market less favorable.

Wong said both home sellers and buyers are in a wait-and-see mood. "The economy is not bad, and the United States did not raise the interest rate, so the sellers are not willing to lower the prices, but on the other hand, the buyers also stay waiting as they expect the prices to fall following the cooling measures."

Wong said some sellers started to reduce the prices in April as they might think the property market has seen a peak or the prices will not rise "sharply" in the near term due to the government curbs.

One seller at Beacon Lodge in Cheung Sha Wan area just sold his 67-square-meter apartment last week after lowering the price to HK$4. 82 million from HK$5.30 million (about $0.68 million), a drop of 9 percent, the head of research at real estate agency Ricacorp Properties, Chow Moon-kit, told Xinhua, adding almost all the transactions in April were boosted by price cut.

According to Centaline data, Hong Kong's secondary residential property prices had dropped for fifth consecutive month as of April 26 affected by doubling stamp duty on specialized properties since February and mortgage rate hike, with a cumulative decline of 4.01 percent.

In addition, the Centa-City Leading Index, a gauge of Hong Kong's pre-owned housing market compiled by Centaline, went down to 118.71 as of April 26, a 13-week low.

At the same time, the trading volume of second-hand houses picked up last month. Hong Kong's 50 major private housing estates tracked by Ricacorp Properties saw an increase in weekly trading volume to 90 to 100 in April from 60 to 70 in March.

Wong expects the overall home prices in Hong Kong to go down in the second quarter following the government intervention. "The current adjustment is still a little bit slower, probably because the selling sentiment is not strong enough."

If home price can return to a more sustainable level, Hong Kong's property transactions are likely to warm up in May and June, which are traditionally low seasons, Wong said.