First-time, end-user buyers are reluctant to enter the fragile housing market, as evidenced by the continuous decline in the number of applicants for the government subsidised Home Starter Loan Scheme. The Hong Kong Housing Society said there were 1,251 new applicants for loans in January, bringing total applications to 24,800 since the launch of the scheme early last year. The number of new applicants for January was 43.3 per cent lower than the 2,208 people who had registered in October last year, when the Hong Kong housing market had experienced a short-lived recovery. According to the housing society, there were 1,457 new applicants recorded in November and 1,285 recorded in December. Estate agents said the continued drop in applicants reflected buyer concern over the outlook for the housing sector. Buying desire also was hit by a stream of negative news such as unstable economic environment and the growing number of unemployed. Home prices were reported to have dropped 3 per cent since December, and agents predicted a further modest drop in the next couple of months. Ricacorp Properties managing director Barry Law Lam-wai said buying sentiment was clouded by some negative factors, although he believed demand existed in the market. The housing society has granted approval certificates to 9,957 eligible loan applicants as at January. A spokesman said 3,997 applicants had drawn down loans for purchase of apartments at the end of last month. Some applicants also had committed to buying properties but had delayed drawing down loans until purchases were completed. Estate agents hoped applicant numbers would revive and property market activity would rebound after the Lunar New Year. Hong Kong Property Services (Agency) managing director Michael Choi Ngai-min said buying activity would recover in March, but he did not expect to see any rise in home values. Mr Law said home prices would rebound after the New Year, assuming a further cut of 100 basis points in interest rates.