Hong Kong’s high-end home sales slowed sharply after rich buyers pulled back following a stamp duty hike.

The city recorded 13 transactions in March for homes valued above HK$100 million ($12.8 million), more than halving from a high of 28 deals in January, according to property database EPRC.

Business tycoons and finance veterans had been snapping up mansions and upscale apartments in the Asian financial hub in the months leading up to the tax hike announced in February.

ALSO READ: Hong Kong developers sell $750m of luxury homes in weeks

The Hong Kong Special Administrative Region government increased stamp duty on residential property deals valued above HK$100 million to 6.5 percent from 4.25 percent in its budget in late February, after a surge in market activity. The measure is expected to affect only a small fraction of total transactions but generate around HK$1 billion of additional annual revenue.

Developers recorded a number of high-profile property transactions in the last few months, including a couple of mansions sold for HK$2.2 billion by Swire Properties Ltd. Alongside local and Chinese mainland buyers, global ultra-rich families have also been active in upmarket districts.

The founding family of Mongolia conglomerate Mongolyn Alt LLC bought a mansion for HK$247 million in January through a holding vehicle, according to regulatory filings. Tselmuun Nyamtaishir, the company’s president, told Bloomberg News the founders plan to use the property as a retirement residence.

READ MORE: Hong Kong house sells for $133m with 25% gain over decade

“Rich buyers are still taking time to process the impact of the stamp duty increase,” said Benny Sham, a research analyst at Midland Realty. “The recent conflict in the Middle East has also reversed the market expectation for further interest rate cuts this year, which could also prompt investors to stay on the sidelines” he said.

Some developers have begun offering more incentives to weather a potential slowdown in sales. For instance, Kerry Properties Ltd said the buyer of a HK$230 million unit at its Mont Verra project in the Kowloon area will receive a subsidy equivalent to 6.5 percent of the purchase price, matching the stamp duty, according to a regulatory filing in March.

Meanwhile, the city’s broader residential property market is showing tentative signs of recovery. Home prices have risen for nine months in a row, according to an index of private residential units. The gauge has climbed 7.4 percent from May but remains well below its peak.