Private home prices in Hong Kong fell to their lowest level since February 2020 in July, official data showed, as home buyers grew more pessimistic due to rising interest rates and an uncertain outlook.

Home prices in one of the world’s most unaffordable housing markets fell 1.6% last month from the previous month, compared to a revised 0.9% fall in June.

The property price index fell to 376.1 points in July.

Home prices are down 4.5% so far this year.

“There is a dearth of positive news in the market and as the pandemic spreads again, so many buyers and sellers are waiting on the sidelines, reducing trading volume,” says Knight Frank’s head of research and advisory for Greater China.

The financial hub, whose economy has been weighed down by the coronavirus measures, saw cases rise again to 10,000 on Sunday.

Prices are expected to continue to ease in August and September, but are likely to stabilize when Hong Kong and mainland China ease travel restrictions.