* New World slides 7 pct, property agent Midland plunges 14 pct
* Number of second-hand buyers fall 40 pct at weekend -property agency
* Curbs seen cooling demand; may not lead to big price adjustment (Adds video link)
By Clement Tan and Alison Leung
HONG KONG, Oct 29 Hong Kong real estate stocks sank on Monday as investors locked in profits in the outperforming sector on worries that surprisingly tough new measures to cool soaring property prices will sap demand from non-resident buyers.
The falls come after the government, echoing similar moves by Singapore, imposed a 15 percent tax on non-resident and corporate property buyers and stiffened resale stamp duty fees in the hope of calming prices, which have surpassed historical highs hit in 1997.
Some property agents said the measures, which came into effect on Saturday, had already had an impact.
"The number of second-hand buyers dropped 40 percent over the weekend to the lowest this year," said Wong Leung Sing, associate director of Centaline Property Agency.
The moves to cool speculation follow a series of currency market interventions by Hong Kong's central bank to defend the city's 29-year-old peg to the U.S. dollar as a third round of quantitative easing by the U.S. Federal Reserve spurred capital inflows to the former British territory.
Hot money flows have added to the attractive mix of low interest rates, no capital gains tax and the stable exchange rate to drive prices higher.
Hong Kong leader Leung Chun-ying, who was sworn in on July 1, has made affordable housing a focus for his administration in a city with residential prices among the highest in the world, fuelled in part by voracious demand from rich Chinese.
The runaway real estate market has created festering social and political problems and forced the Hong Kong Monetary Authority (HKMA) in September to curb home loans to borrowers with more than one mortgage.
Shares of New World Development, which before Monday had more than doubled so far this year, led the fall and were down nearly 7 percent by midday.
Cheung Kong (Holdings) Ltd and Sun Hung Kai Properties Ltd, Hong Kong's top two developers, each fell more than 5 percent.
Property agent Midland Holdings Ltd plunged as much as 16 percent, its largest single day fall in almost two years, and was down more than 14 percent by midday.
The Hang Seng Property Index, a sub-index that tracks the seven Hong Kong and two Chinese developer stocks that are components of the Hang Seng Index, fell 4 percent, lagging a 0.2 percent drop in the benchmark Hang Seng Index .
"I think many are quite surprised by the severity of the 15 percent special duty, so many are taking profits on the sector, which has done very well this year so far," said Jackson Wong, vice-president for Tanrich Securities.
"It will probably reduce demand from the mainland by 15-20 percent, particularly for the high-end market."
Citigroup said the measures to contain home prices, which rose about 20 percent in the first nine months of this year, should be effective and that this would remove policy risk and asset bubble concerns.
"We believe any dip in Hong Kong property stocks on Monday would simply represent an enhanced buying opportunity," it said.
Despite Hong Kong's reputation as a city of skyscrapers, luxury cars and swanky malls, around a tenth of families in the city of seven million live in relative poverty, according to Oxfam. The wealth gap stands now among the widest of any Asian developed economy.
A series of cooling measures since 2009 have had little impact on property prices and some analysts said that while the latest steps were expected to hit demand they might not result in a major adjustment in prices.
In December, Singapore imposed an additional 10 percent stamp duty on foreign and corporate property buyers in a bid to cool soaring prices. (Additional reporting by Yimou Lee; Editing by Anne Marie Roantree and Jacqueline Wong)