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Hong Kong property shares fall on fresh housing curbs

* Further curbs expected in near future

* New measures to have short-term effect only-analysts

* Property bubble remains threat to Hong Kong's stability

* Centa-City Leading Index of property prices at record high

* Home buying to continue as bank deposits are "useless"-analyst

By Yimou Lee

HONG KONG, Feb 25 (Reuters) - Shares of Hong Kong property companies like Cheung Kong Holdings Ltd and Sun Hung Kai Properties Ltd fell to their lowest in nearly two months on Monday with realtors taking the bigger hit after the city's government introduced late last Friday tougher measures to cool the market.

Property agent Midland Holdings Ltd fell as much as 6.6 percent to its lowest in three months in morning trade, topping losses in the sector. Cheung Kong Holdings fell 1.9 percent, while Sun Hung Kai Properties dropped 2.3 percent. The Hang Seng Index went into the midday trading break up 0.1 percent at 22,783.7.

Analysts expect the new cooling measures to only have a short-term effect on property transactions and said Hong Kong's government is likely to launch further housing curbs in the near future.

"It would have immediate negative impact on the property market," said Jennifer Wong, KPMG's tax partner in Hong Kong. "But if Hong Kong remains in the low interest rate environment, and there is a lot of hot-money chasing in high returns, the speculation will come back."

The Hong Kong government announced on Friday that the stamp duty for flats costing less than HK$2 million (about $258,000) would be increased from HK$100 to 1.5 percent of the transaction price. For other properties, the stamp duty would be doubled to as much as 8.5 percent of the residential transaction price.

The government also said it would standardise the stamp duty regime for non-residential properties such as shops, factory space, office space and even car parks.

"It won't be effective at all in terms of curbing home prices," said Wong Leung Sing, an analyst at Centaline Property Agency, adding that new measures will only curb short-term demand but home prices will keep rising.

"People will keeping buying homes since it's completely useless to put money in the bank," Wong said. "The government will definitely launch more cooling measures."

The Centa-City Leading Index, a widely used indicator of the city's residential price trends, is now at a record 121.7, 5 percent higher than the same period in mid-January.

John Tsang, Hong Kong's financial secretary, told reporters on Friday that the risk of an asset bubble is increasing.

"If we allow the bubble to grow, in the end it will affect the macroeconomy and also the stability of the financial system. It will be very damaging to society," Tsang said.

In Hong Kong, the blue chip property sub-index has fallen 5.6 percent so far in February amid concerns over fresh housing curbs, its biggest monthly decline since May 2012. The index jumped 37.6 percent in 2012.

Since October 2009, the Hong Kong government has taken a series of steps to curb prices, including a 15 percent property tax on foreign buyers, mortgage restrictions and taxes on quick resales.

(Editing by Matt Driskill)