Stocks of Hong Kong developers rose after Financial Secretary Paul Chan scrapped property cooling measures in a bid to bolster the sector, which has been weighed down by high borrowing costs and weak economic sentiment.

In his budget speech on Wednesday, Chan announced that Hong Kong will withdraw all buy-side tightening measures for residential properties and waive stamp duties payable on the transfer of REIT units with immediate effect.

The Hang Seng Property index jumped 2.4% following the announcement, but has since slipped from session highs, while the broader Hang Seng index fell 1.47%. New World Development shares jumped as much as over 8% before currently trading at 4%, and Hysan Development added 0.3%. Sun Hung Kai Properties and CK Asset rose 1.35% and 0.55% respectively, while Henderson Land Development traded 3.83% higher.

Hong Kong’s housing prices, once the most expensive in the world, have plunged almost 20% since their peak in 2021 on the back of rising interest rates and dimmer market sentiment.

The sale and purchase agreements for all building units in 2023 fell 2.7% from a year ago, according to the city’s Land Registry. Sales were also nearly 40% lower than 2021. The government’s home price index also declined for the ninth straight month in January, falling 1.57%.

“With these reductions in stamp duty, I think we’ll see certainly a fairly quick pickup and transaction volumes,” Peter Churchouse, managing director of Portwood Capital, a leading real estate investment company. “Then towards the back end of the year, we might start to see a little bit of a pickup in property prices.”

Up until recently, the city imposed a 7.5% stamp duty on non-permanent residents purchasing property as well as additional properties purchased by permanent residents. The rates for both levies were slashed from 15% in October.

Churchouse added that this could “be a bit of a positive flip” for the wider Hong Kong stock market as it is highly correlated with the residential property market. Hong Kong’s stock markets have plunged around 40% from its highs a couple of years ago.

“We might see a little bit of light at the end of the stock market tunnel,” he said.

Chan also signaled more room to ease policies on property lending. Hong Kong’s Monetary Authority is set to make announcements later in the day.

Chan added he is expecting the economy to grow in a range of 2.5% to 3.5% this year.

Hong Kong’s government is also rolling out over 1 billion Hong Kong dollars ($127 million) to support its tourism industry.