Private home prices have fallen to their lowest level in three-and-a-half years, according to government data released on Wednesday.

The Rating and Valuation Department's private domestic price index in August dropped 2.3 percent month-on-month to 368.2, the lowest reading since February 2019.

Small and medium-sized homes were 2.3 percent cheaper than they were in July, while prices of larger flats recorded a 0.8 percent decrease.

Compared to the same month last year, August home prices were down 7.4 percent.

So far this year, home prices have tumbled 6.5 percent.

Rents in August, however, continued to head north, with the private domestic rental index rising to 179.7 from 178.4 the month before.

A senior director for research and consultancy at Savills, Simon Smith, warned that property prices could fall further and at a quicker pace. "It's difficult to see any really positive news around the corner at this point," he said.

"There are a number of negative factors impacting the market, it's not just about rising interest rates which are translating to higher mortgage rates... we are also seeing stock market volatility, we've seen heavy falls over recent weeks, and we found that often translates to lower demand for real estate."