Property sales in Hong Kong bounced back modestly last month after a sharp decline in August, but total sales volume was still 31.6 per cent down on September last year, despite incentives from developers. Overall transactions in September rose 5.2 per cent from the previous month to 5,467, with a total sales value of HK$41.4 billion, up 8.6 per cent. Residential transactions rose 9.4 per cent month-on-month to 4,263 deals, on transaction values of HK$33.5 billion, up 7.9 per cent, according to the Land Registry. In August, total property transactions fell 29.2 per cent from July to 5,197, the lowest level in 17 months. Residential transactions plunged 27.8 per cent. Analysts said the bounce-back was helped by the flexible incentives being offered by developers seeking to speed up sales before interest rates start to rise, something now expected by the end of this year. "Last month's increase was mainly helped by positive sales in the first-hand residential market," said Derek Chan, head of research at Ricacorp Properties. "But it does not mean the housing market has been recovering. Sales in the secondary market continue to fall." On a year-on-year basis, total sales value fell 23.1 per cent last month, while residential transactions were down 28.4 per cent, with total residential sales value down 20.5 per cent. Chan said prices would correct as second-hand flat owners were more willing to cut asking prices to speed up sales, and developers offered units at prices close to secondary home prices. Medium-sized developer Kowloon Development offered initial down payments as low as 5 per cent at its Upper East project in Hung Hom, compared with 30 per cent in the secondary market. The developer also launched a promotion during the Mid-Autumn Festival holiday that offered those who bought two or more units an additional 2 per cent cash rebate, on top of a 14 per cent discount. An increasing number of analysts at international investment banks expect Hong Kong home prices will drop, with some expecting the fall could be as much as 30 per cent by 2017 as rates rise and the economy deteriorates. Home prices have risen about 11 per cent so far this year, according to agents. In the primary market, the number of units sold last month rose 54 per cent month-on-month to 1,579. In the market for used homes, sales fell 15 per cent to 2,800 deals, Ricacorp said. As there is usually a lag between a transaction and its registration, the September figures reflect the market in August to early September.