Government data on Tuesday showed that home prices dropped last month to their lowest level since August 2016.

Private residential prices in September were down 1.67 percent month-on-month and 12.5 percent year-on-year, according to the Rating and Valuation Department.

Rents, meanwhile, rose for the seventh consecutive month to reach a five-year high.

Eddie Kwok from CBRE Hong Kong said measures announced in the recent Policy Address, such as an adjustment to the maximum loan-to-value ratio for mortgages, helped stabilise prices in the past two weeks.

Kwok said prices are likely to bottom out soon.

"Yield-seeking investors may be a demand driver entering the residential market as residential prices reached a relatively low level, coupled with expected lower financing costs going forward," he said in a statement.

Kwok said that rents, which were 5.8 percent higher in September year-on-year, are likely to continue to rise, but should moderate in the short term now that students from overseas have already moved into their new homes for the academic year.