In attempts to stave off effects stemming from a potential curbing of the US Federal Reserve's bond-buying program, the Hong Kong Monetary Authority had turned to the real estate market to jack up the state coffers.

The financial agency of Hong Kong had implemented a policy across all potential real estate buyers to place a 50% to 60% minimum downpayment in property acquisitions. According to Bloomberg, this had made a huge effect in luxury properties in the Asian state, and contributed to the slowest gains of property dealers. This would be the sixth time the Hong Kong government increased its minimum downpayment requirement in the past three years, Bloomberg noted.

The government of Hong Kong had also doubled stamp-duty taxes for all real estate properties worth more than HKD 2 million. Properties below the HKD2 million value would be imposed a duty tax of 1.5%, while 8.5% would be imposed as tax to homes priced over HKD21.7 million.

Data obtained by the news agency indicated that home prices for high-end apartments measuring over a thousand square feet cost a minimum HKD10 million. Broker Cushman & Wakefield Inc projected that home prices within this bracket would fall 3% in the last quarter of this year, summing up to a 3% overall drop for 2013.

Midland Holdings Ltd chief analyst Buggle Lau said, "The luxury segment has taken the first and the most direct hit. The measures were aimed at driving the speculators away and they have certainly achieved that, but many people wanting to buy for their own use are also affected."

Broker Knight Frank LLP research director Thomas Lam said, "For a while, Chinese buyers were the main driver for luxury homes. When you raise buying costs for them, of course it takes away a large part of the demand."

Property developers Swire Properties and Kerry Properties for example, had been feeling the brunt of the regulations. Swire's sales decreased 17% this year, while Kerry dipped 18%. The Hang Seng Property Index dropped 5.7% since December of last year as the index tracked 9 of Hong Kong's biggest developers.