New World Development managing director Henry Cheng described the proposed measures, which include a sharp hike in stamp duty, as "a strong dose" that will do as much harm as good.

"In the process of warding off speculators, genuine buyers and those with low incomes will be affected. They're getting the wrong guy. These measures do not fit with the government's aim to help the common folk," he told AFP.

Hong Kong's Financial Secretary John Tsang Friday unveiled a package of measures to restrain runaway property prices in the densely populated former British colony, which is favoured by super-rich mainland Chinese investors.

In an attempt to discourage property speculation, as of the weekend anyone reselling a property within six months of purchase is subject to a 15 percent stamp duty.

A 10 percent duty applies to sales between six and 12 months and five percent between 12 and 24 months.

The head of the Hong Kong Monetary Authority, the city's de facto central bank, also outlined measures that limit the availability of mortgages.

The move followed public anger in the city -- which is traditionally associated with laissez-faire policies -- and a warning from the IMF of a potential bubble.

The measures appeared to have an immediate impact even though they have yet to be passed by the city's lawmaking body, the Legislative Council, with secondary residential home sales plummeting over the weekend.

Ricacorp, one of Hong Kong's largest real estate agents, said sales had fallen by 70 percent on Saturday and Sunday compared with the previous week.

"These measures are not necessarily suitable to Hong Kong," New World's Cheng said, adding that the shortage of land and housing in the city was at the heart of the problem.

DBS Vickers sales director Peter Lai told AFP he expects property transactions to shrink by at least 20 percent in the coming months and real estate prices to drop 10 percent.

"These heavy measures will have an immediate impact, we have seen that happening already, the property market is cooling down significantly," he said.

"I anticipate the effect will be more pronounced in the short run. Issues including shortage in land and housing supply still need to be addressed in the long run."

Real Estate Developers' Association vice-chairman Stewart Leung echoed Cheng, saying end users will suffer from the new measures, local paper The Standard reported.

The measures to help cool the market were felt on the Hong Kong stock market, where shares fell 2.67 percent Tuesday, with global market tremors and tensions on the Korean peninsula also weighing, traders said.

The benchmark Hang Seng Index lost 627.88 points to close at 22,896.14 on turnover of 92.24 billion Hong Kong dollars (11.89 billion US).

Among Hong Kong developers, Cheung Kong dropped 4.46 percent, Sino Land 3.77 percent and Sun Hung Kai Properties 3.31 percent.

Midland Holdings, the owner of Midland Realty, one of Hong Kong's largest real estate agencies, slumped 5.09 percent.

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