According to official data published on Tuesday, private home prices in Hong Kong edged down 1.12% last month compared to June, the third consecutive monthly decline.

The findings revealed soaring interest rates and a weak economic outlook impacted homebuyer sentiment.

The fall in home prices in July in Hong Kong – considered one of the world’s most expensive markets – followed on from a revised 1.05% decline the month before, according to this latest data.

Home prices in the financial hub have fallen since May after a short-lived rally earlier in the year from a 15% fall last year, Reuters news agency reports.

According to developer Henderson Land, in its earnings statement released last week, Hong Kong’s property market would be “quite depressed” in the second half of the year. This would be the case if no new measures were proposed by the government as the downward trajectory for house prices in the secondary market had “become obvious.”

Furthermore, the industry has been pressing the government to ease more property market restrictions to boost transactions. However, the government has repeatedly said that this was not the right time for further adjustments to be made as property prices are still comparatively high during a housing shortage.

In addition, a new home launch being carried out by major property developer CK Assets, with prices at seven-year lows, shocked the market and may heighten a price war within Hong Kong, according to real estate agents.

The volume of transactions in the financial hub in August was set to decline for the fifth consecutive month to an eight-month-low, as per a forecast by property agent Centaline.