The Land Registry recorded 6,762 sale and purchase agreements for building units last month, up 6.4 per cent on August last year.

The transactions were mainly supported by sales of cut-price flats in the primary market which had dampened buying interest in the secondary market, analysts said.

In terms of value, the property deals were worth $18.54 billion, down 12.5 per cent on July and 10 per cent less than August last year.

Chung Sen Surveyors director Cheng Wing-ming said the drop in property activity was not unexpected as the secondary market had been quiet in June and July.

'I predict the sales volume will stay at this level over the next two months,' he said.

Because of the typical delay of up to four weeks between people buying a property and registering it with the Government, the Land Registry's figures for last month better reflect the level of property sales activity actually conducted in July.

New developments put on sale in July included Bayshore Towers, Parc Regal, Crystal Park and Richwood Park, which recorded varied buyer response.

Analysts expected to see a further slowdown in the number of sales and purchases for the registry's September figures, which better reflects sales in August.

Only four new developments - University Heights, Kingswood Villas, Villa Camellia and Classical Gardens - were put on sale last month, comprising about 700 units.

The secondary market remained in the doldrums with buyers concentrating on developer sales of cut-price flats.

The relaxed mortgage lending policies of banks, through various new schemes, failed to lift buying figures much.

In a bid to drum up business, banks, led by Hongkong Bank, have in general reduced the standard mortgage rate between a quarter and a half of a percentage point since the middle of last month.

Land Power International managing director Michael Choi Ngai-min said last month's property transaction figures were lower than what he had expected.

He did not expect a rebound in sales volume in this month's figures because of the limited number of new developments offered in the primary market last month.

'But the situation will improve in the registry's November figures due to the encouraging response to the latest sale of Henderson Land Development Co's Flora Plaza in Fanling,' he said.

He said there would not be any substantial improvement in the next few months in the secondary market.

Mr Choi said home prices in some districts could drop a further five per cent.

Analysts said many developers had a backlog of new properties to go on sale in the coming months, and home buyers were still hesitant.

This could continue to contain activity in the secondary market.

Besides Flora Plaza, other projects on sale include Hang Lung Development Co's Parc Versailles in Tai Po, Wheelock Properties' Parc Regal in Ho Man Tin and Crystal Park, a joint venture of Sino Group and Kerry Group in Yuen Long.