The worst is over for Hong Kong's property sector, says Salomon Smith Barney managing director Michael Green. 'I believe the recovery has already begun in local property prices,' Mr Green said. Speaking at the launch of the Asian Property Summit, Mr Green said residential property prices should hit the bottom next month because of Hong Kong's 'incredibly robust economy'. But Mr Green agreed some developers might continue to reduce their project prices, as further interest rate rises could affect their debt servicing costs. 'For developers, timing is an important consideration . . . some may be unsatisfied with floating interest rates and will want to get rid of their unsold flats to pay down their debt,' he said. 'It will be a while before there is a consolidation of new flat prices.' Mr Green said property companies might opt for a fixed, rather than floating, rate debt to finance projects in the future, despite potentially higher pricing. He said assuming local overnight interbank lending rates stayed about 9 per cent this year, and household incomes did not decline sharply, home property prices should rise 5 per cent this year and a further 10 per cent next year. Mr Green said his study of asking prices showed local properties had declined only 20 to 25 per cent from their peak last May. But real estate agents and the media only reported transactions and prices at the 'extreme edge of the declines', distorting the real situation. He had suggested to the Government some mechanism be set up to disseminate the latest property market information, as a better-informed market was the best curb to speculative price rises.