Hong Kong home prices slumped for the third month in a row in February, dropping to their lowest level in almost nine years.

The Rating and Valuation Department on Thursday said prices fell almost 0.9 percent from the month before, following a decline of 0.7 percent in January.

The official home price index in February was at its lowest level since July 2016.

Rents, meanwhile, were up 0.3 percent from January, reaching their highest level in five months.

Commenting on the latest data, Eddie Kwok, executive director of valuation and advisory services at property consultancy firm CBRE Hong Kong, said the city's overall property prices were still "largely stable" and the latest declines were partially due to reduced transaction activities during the Lunar New Year holiday.

He said he expects market sentiment to turn positive in the months ahead as the SAR government has reduced stamp duty to HK$100 for properties valued up to HK$4 million, adding that the stock market revival could also lend support.

"We see the residential property prices are bottoming out," he said.

"However, as developers are pushing units to capture pent-up demand, it might be difficult for the residential market to record a strong rebound," he said, adding that price increases might only apply to newly built units.

Kathy Lee, head of research and retail consultancy at property firm Colliers, said stamp duty adjustments could have weighed on home prices.

"Sellers and buyers have tried to push the selling price or purchase price to be below the HK$4 million threshold. That could also have had some impact on the price declines over the past month," she said.

While Lee forecast that prices will remain static in the first half of the year, she said there could be total growth of up to 0.5 percent by the end of the year if the US Federal Reserve reduces interest rates.

Both Kwok and Lee said the rental market will remain strong, especially over the summer, because it will be boosted by demand from new arrivals to the city.

"However, the increases of rental prices will not be to a great extent as there's also the affordability cap for new arrivals such as students," Lee said.