Property firms expect a sharp fall in Hong Kong property prices and turnover as a result of new curbs that are designed to cool prices.

Some property firms in Asia are predicting turnover in Hong Kong’s property market could collapse in the next three months and prices fall in the wake of a sharp hike in stamp duty tax on certain real estate deals, according to Bloomberg.

The prediction was made by Louis Chan, chief executive of the residential unit of Centaline Property Agency. He said turnover could crash by as much as 70 per cent and prices could fall by between 5 per cent and 8 per cent. Separately, Ricacorp Properties’s Willy Liu said transactions will drop 30 per cent to 40 per cent in the next two months and prices will fall 5 per cent.

The predictions are caused by curbs to the market by the Hong Kong government in a bid to try and cool red-hot price levels making the city-state one of the most expensive, if not the most expensive, in the world.

The news report said the Centaline Property Centa-City Leading Index, which tracks sales in the secondary market, is up 13 per cent since reaching a low point in March and is 2 per cent below its record level last September, highlighting why policymakers have sought to curb prices. Some other figures suggest a slightly less strong performance, however. According to a recent quarterly report by Knight Frank, prime property prices in Hong Kong fell 2.6 per cent in the 12 months to end-September 2016. In Shanghai, by contrast, they skyrocked by almost 24 per cent. Vancouver saw the strongest rise of all, up 31.6 per cent.

Late last week, the government said it will raise the stamp duty to 15 per cent for all residential purchases, with an exemption for first-time buyers who are permanent residents. The stamp duty's previous highest level was 8.5 per cent. Foreigners already paid the 15 per cent stamp duty level. The change, the news report said, means foreign buyers must shoulder a whopping 30 per cent stamp duty.

The report added that developers have already moved to suspend sales in the city. Sun Hung Kai, Henderson Land and New World Development Co are reportedly halting sales.