A year after the government launched a series of measures to ease surging home prices, Hong Kong's housing market has shown tentative signs of slowing in the past month after considerable price inflation since January.
But there are growing concerns that stronger tightening measures may be in the offing.
Although prices have risen, transactions have slowed considerably, prompting some market analysts to warn against any further tightening.
Buyers have generally boosted home prices in the secondary market to record levels over the past year, though buying interest seems to have waned somewhat in the past month.
The Centa-City Leading Index (CCL), which tracks changes in home prices in the secondary market, closed at 104.01 for the week to June 8 - the highest level ever.
In fact, the index has posted records every week since May 11 when it first breached the level of 102.93, which was reached at the peak of the last property boom in October 1997 before the Asian financial crisis.
The relentless price inflation was despite a number of measures aimed at curbing speculation.
On June 10 last year, the Hong Kong Monetary Authority cut the loan ceiling on homes with values exceeding HK$10 million from 60 per cent of their value to 50 per cent.
As for properties of HK$7 million to HK$10 million, the maximum amount that banks could lend was cut from 70 per cent to 60 per cent, subject to a maximum loan of HK$5 million.
The measures were additional to the introduction of a special stamp duty of as much as 15 per cent on homes that are resold quickly.
As property prices continued to rise, Financial Secretary John Tsang Chun-wah and Hong Kong Monetary Authority chief Norman Chan Tak-lam warned of the growing risks of an overheating market.
Chan has said the HKMA might further intervene to cool the market if prices continue to rise.
There is growing speculation about further measures being taken to rein in prices, but property agents warn that could damage the market that may already be consolidating.
'Prices have kept rising, but today's sales volumes are below that in the first half of last year,' said Buggle Lau, chief analyst at Midland Realty.
According to Ricacorp Properties, when official data on the number of property transactions in May is released, it might show that deal volume had fallen to roughly 9,000, a month-on-month decline of as much as 20 per cent.
That's against the backdrop of a falling stock market and heightened concerns over Europe's ability to resolve the sovereign debt crisis.
Lau estimates about 33,000 homes were sold in the secondary market between January and early this month, down from 50,000 in the first half of last year and 25,000 in the second half.
Home prices fell 5 per cent in the second half after the new tighter mortgage conditions were announced.
'In retrospect, we cannot say the government measures have not been effective,' Lau said.
He also said pent-up demand and low interest rates had led home prices to rise since February. 'But as home sellers keep raising asking prices, demand will drop because buyers will not be willing to pay.'