'But the middle-class people are really the ones that are affected, as they can't even cut their losses if the environment has changed or they have economic difficulties two years after buying a property.

'What should they do when they can't afford to pay for their flat?'

Leung's comment came after the government unveiled measures last Friday including the introduction of a stamp duty of 5 per cent to 15 per cent on homes bought from last Saturday onwards and sold within two years.

The Hong Kong Monetary Authority also reduced the amount banks could lend to buyers.

Leung said the government had not consulted the association before rolling out the measures. He hoped they would be for the short term only and said members of the group would discuss them. He said he believed developers' plans for flat sales would not be affected.

Albert Wong Kam-hong, a senior executive director at Midland Realty, said the huge fall in transactions over the weekend shocked many people and sent a 'bad signal' to the market.

'Even back in 1997 [when the property bubble burst], we didn't see such a sudden and steep drop,' he said. 'It scares off end users.'

Wong warned that severe policies might have a long-term impact on market confidence and said restrictions on mortgage loans should not be too tight.

'Flats worth a few million are not luxury homes; many of these are only two-bedroom flats,' he said.

Sharmaine Lau Yuen-yuen, chief economic analyst at mReferral Mortgage Brokerage Services, said the reduction in the maximum loan that could be taken out on a given property would affect end users, who now needed more for a down payment.

At the joint meeting of the Legislative Council's financial affairs and housing panels yesterday, lawmakers expressed approval for the new anti-speculation measures.

But many of the legislators were worried that some speculators would try to buy and sell properties using companies as the registered owners so as to avoid paying stamp duty. They urged the government to plug the loophole.

Some lawmakers were concerned that speculators would choose commercial properties as their next target.

'We haven't seen a lot of companies that hold properties involved in speculative activities. If that does exist, we may unveil other policies,' housing minister Eva Cheng told the legislators.

Hong Kong shares fell yesterday, led by the city's property developers, on the first day of trading after the measures were announced. The Hang Seng Properties Sub-index sank 792.16 points, or 2.55 per cent, to 30,283.93.

Turning cautious

Number of home sales on the weekend in Taikoo Shing and South Horizons: 0