Hong Kong's notoriously red-hot property market will slide 8 percent this quarter, CLSA predicts, on top of last quarter's 7.5 percent drop.
Nicole Wong, CLSA's regional head of property research, told CNBC's Squawk Box that the property price slump would trigger price cuts by developers as they bid to lure buyers.
With a double-digit percentage-point declines in prices over consecutive quarters, the Hong Kong government was likely to lift some of property market cooling measures it has implemented in recent years, Wong said.
One of the world's most expensive property markets, the Hong Kong government has attempted to curb speculation in the past through measures that including raising down-payment requirements and doubling the stamp duty or property transaction tax that is payable by many buyers, mainly non-permanent residents.
The double-stamp duty is the measure most likely to be lifted, Wong said.
Meanwhile in China, property looks set to clock further growth, at least in the first half of the year, the analyst said.
"It's one of the few segments where the government can support. They will support it with direct subsidies, indirect subsidies, monetary easing and just keep it at a reasonable, stable level," she said.
Keeping the property market steady contributes to overall stability of the financial markets, reducing systematic risks to banks, Wong noted.
Last year, residential prices in China's first tier cities rose 17 percent. But 2016's upside may be limited to the first half, because transaction volumes were trailing price gains, reducing affordability, Wong noted.