HONG KONG, April 27 (Reuters) - Declines in Hong Kong private home prices slowed in March as a COVID wave in the city stabilised and the government foreshadowed an easing of social restrictions, official data showed on Wednesday.

Prices in the world's most unaffordable housing market were 0.7% lower in March than in the previous month, according to the data. That compared with a revised monthly fall of 2% seen in February.

Private home prices have fallen 3.2% so far this year to the lowest level since December 2020, driven down by the economic effect of some of the world's most stringent social restrictions for fighting COVID. The government measures have also prompted real estate agents to lower forecasts for the rest of 2022. .

Nonetheless, realtors estimate the housing market has bottomed, with prices and transaction volumes trending up this month. Property developers are rushing to launch new sales in response to the withdrawal of some social restrictions, taking effect this month.

Presales of Grand Mayfair I, a development in Yuen Long, New Territories, received 25 times over-subscription for 388 units on offer, local media reported. Grand Mayfair I is being developed by Sino Land, K. Wah International Holdings and China Overseas Land & Investment.

Major developer Sun Hung Kai Properties (SHKP) said last week it planned to launch new sales in around six developments this quarter and next.

"The property market will likely ... see a relatively strong bounce in third and fourth quarter. expect it will post a 5-10% gain for the full year," said SHKP Deputy Managing Director Victor Lui.

Realtor Hong Kong Property said its survey in mid-April showed 36.2% of the respondents were optimistic about the property market in the next 12 months, rising from 28.4% three months earlier, while those who felt pessimistic dropped to 33.7% from 42.3%.

Shortage of land is the main factor behind Hong Kong's housing prices, which survey company Demographia ranks as the world's highest.

An 80-square-metre (860-square-foot) apartment on Hong Kong island costs around HK$16 million ($2 million), according to the latest data.

($1 = 7.8283 Hong Kong dollars) (Reporting by Clare Jim; Editing by Bradley Perrett)