The International Monetary Fund said Monday Hong Kong property prices are set to see adjustments following years of boom.

The city's housing market has become one of the most expensive in the world -- prices have more than doubled since 2008 -- due to an influx of capital from the mainland and record low interest rates thanks to US quantitative easing.

Housing affordability has become a thorny issue for the Hong Kong government, with officials forced to introduce a series of measures to curb rising prices.

But an expected US tapering and an interest rate hike are set to bring down prices, the IMF said.

"Some adjustments are necessary," Rhee Chang-Yong, IMF's director of Asia and Pacific Department, told a press conference in Hong Kong on Monday as the international lender released its latest regional economic outlook.

"As interest rates go up because of tapering, it is one issue Hong Kong government needs to focus on," he said.

"Borrowing costs will increase. It definitely will have an impact on real estate," he said.

Since 2010, authorities have implemented several measures to curb rising property prices, including an unprecedented bid to restrict the number of non-local homebuyers with a 15 percent property tax on foreign investors.

Rhee said Hong Kong government can consider weakening some of the measures when prices start to fall in a more significant manner in order to achieve a "soft landing".

The recommendations came as the IMF expected the city's GDP to grow by 3.7 percent this year, before edging up to 3.8 percent next year.

In general, the IMF projects Asia's growth to remain steady at 5.4 percent this year, compared to 5.2 percent last year.

It can further improve to 5.5 percent in the next year, driven by demand, the IMF said.

"External demand is set to pick up alongside the recovery in advanced economies, and domestic demand should remain solid across most of the region," its outlook report published on its website said.

"Asia remains the most dynamic region despite tapering," Rhee said in the press conference.

But a faster-than-thought slowdown in China and a sluggish Japan are two big risks to the region's economic outlook.

China is expected to grow by 7.5 percent this year before slowing to 7.3 percent next year, IMF said. Japan could grow by 1.4 percent this year before lowering to 1.0 percent next year, it said.

"There is a possibility that Abenomics-related measures could prove less effective in boosting growth than envisaged unless strongly supported by structural reforms," the lender said in the report.