By the end of July, the property market had slowed sharply. New home sales fell to 731 units, down 60% from June, while secondary transactions dropped 37% to 3,227, with a further 40% decline expected in August.
Tighter central government controls on capital flows into Hong Kong investments, together with a 20% capital gains tax on 
overseas trust funds, appear to have weighed heavily on market sentiment. Large-scale and high-value buyers have largely stepped back, while local first-time buyer activity has also weakened.
On August 1, Sun Hung Kai Properties launched the third sales round for The Garden Residency in Kam Tin North, Yuen Long, offering 114 units. Only 40 units, or 35% of the available supply, were sold on the first day, compared with full sell-outs in the first two rounds.
The weaker response suggests slowing momentum among first-time buyers and may prompt developers to delay new launches. First-hand transactions are therefore expected to fall 45% this month to about 400 units.
The slowdown in first-hand sales is likely to spill over into the secondary market, where transactions are projected to fall 40% to about 2,000 units this month. Combined first-hand and secondary sales are expected to decline 46% to around 2,400 units, signaling market stagnation and raising the risk of price declines in September.
