Residential property prices in the UK rose at a slightly slower pace of 0.4% in October but annual house price inflation has turned positive for first time since March 2008, according to the monthly figures from Nationwide.

Overall consumer expectations are consistent with house price inflation but poor GDP figures have mixed implications for the real estate market, the country’s largest mortgage lender says.

It was the sixth consecutive month in a row that property prices have increased but it is clear that the strong upward momentum in property values seen over the summer is showing some signs of moderating.

Property transactions in Hong Kong have fallen in the last week since tighter mortgage restrictions were imposed to try to ward off a real estate bubble.

According to real estate agents the decision by the Hong Kong Monetary Authority to cut the mortgage limit on property worth HK$21 million or more to 60% has had an immediate impact.

Hong Kong Chief Executive Donald Tsang confirmed that the government approves of the move and is ready to do its bit.

‘We do not want to see a huge property bubble developing in Hong Kong,’ he told a meeting of businessmen.

He said the government had tools available to stabilise the market but did not give details except to say any action would be motivated by a need for stability, transparency and smooth market operations.

Prices of mass market residential property have surged more than 20% this year, despite the economic downturn, while luxury property prices have soared more than 40% thanks to excess liquidity globally and an influx of cash from newly rich mainland Chinese.

Tsang, however, said that the current surge in prices exhibited far fewer signs of speculative behaviour than a previous property market bubble in 1997 which burst amid the Asian financial crisis.

HKMA Chief Executive Norman Chan said at the time that it was difficult to tell if there was a property bubble.

But the measures might not work since many mainland Chinese buyers of luxury property in the city buy with cash.

The mortgage measures might not calm the luxury sector, analysts warned.

Financial Secretary John Tsang met last week with the city’s property developers to express the government’s concern about sharply rising property prices.

Developers, however, said the government should release land at more reasonable prices, arguing that plots proposed for auction by the government in the past couple of years have been priced too high.

Before a site can be put to auction, a developer has to agree to pay 80% of the site’s recommended price which is set by the government.

NEW YORK (CNNMoney.com) — The national housing slump is finally crashing at the shores of Manhattan island, which had its worst quarter in years, according to several industry reports released on Thursday.

The big hit was seen in sales volume, which plummeted 48% in the first quarter of 2009 compared to the previous quarter and year, according to data compiled by Jonathan Miller, of appraiser Miller Samuel, for Prudential Douglas Elliman.

The primary reason given for the gap was the different expectations of house hunters and sellers. “That’s really showing the huge ocean that separates them,” she said. “Many sellers left their prices too high for too long. We had a lot of long negotiations that ultimately led nowhere.”

The worst of the price falls in the residential property market could be over soon as there are signs that the market is reaching the end of its free fall, it is claimed.

Further price falls are expected but changing market conditions mean that the rate of fall may not be as great as it has been, according Yolande Barnes, head of residential research at the property adviser Savills.

‘We could now be about to enter the latter stages of house price falls and be on the brink of the first stage in the recovery process. This is characterised by low supply as well as low demand levels which causes prices to bottom out,’ she said.

‘We have already seen a pronounced recovery in affordability, thanks to both price falls and reduced interest rates, which sets the platform for a recovery when macro-economic conditions are right,’ she added.