Residential property sales in Hong Kong have plunged by 39% in the six months ending June compared with the same period last year, according to the latest figures from Midland Realty.

Despite a recent improvement in sentiment, the agent said the dim economic outlook and increased home supply continued to cast a shadow over the market, with the average price of a home dropping by an average of 10% since late last year.

Midland said it had “the worst six-month number recorded” since it started surveying prices 25 years ago, after registering 26,571 deals in the period, down 39.1% on the 43,636 deals signed in the first half of 2015.

On a month-on-month basis, the city’s property sales fell only slightly to 6,033 in June, against May’s 6,065, according to The Land Registry.

But property sales are widely expected to pick up in the second half of the year as developers rush to offload stock by offering a range of incentives and discounts. 

Knight Frank forecast a 5% to 10% price drop in the luxury segment of the housing market and up to 10% fall in mass residential prices this year.