(Bloomberg) -- Hong Kong’s biggest property developer posted a decline of 6% in first-half profit as high interest rates and economic uncertainty weighed on buyer interest.

Sun Hung Kai Properties Ltd.’s underlying earnings, which exclude property revaluations, dropped to HK$8.9 billion ($1.1 billion) in the six months ended Dec. 31, the company said in an exchange filing Wednesday.

Transactions for residential property in the city remained muted in the second half due to high interest rates and waning confidence in the city’s role as an international financial center. Offices also saw the highest vacancy rates as cost-conscious tenants trim space or avoid expansion.

Developers including Sun Hung Kai are facing an increasing supply of new homes, prompting some to cut prices for recent launches. The number of available private first-hand residential units rose to 91,300 in the fourth quarter from 86,300 in the previous quarter, JLL data show.

Those challenges have prompted the Hong Kong government to scrap levies curbing homebuyer demand on Wednesday, part of its effort to bolster the financial hub’s economy. 

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