THE value of Hong Kong home transactions fell 60 percent to the lowest in more than two years in August, signaling the city's property market may be poised for its biggest decline since 2003.
The total value of residential transactions last month fell to HK$15 billion (US$1.9 billion) from HK$37.8 billion a year earlier, according to a press release on the Land Registry Website. The figure, the lowest since July 2006, represented a 40-percent decline from the previous month.
Home prices fell in 23 of 25 United States metropolitan areas in June from a year earlier as foreclosures pushed down values, real estate research company Radar Logic said.
The impact of credit market losses may be spreading to Hong Kong, with the threat of a global economic slowdown and a slump in the stock market leading potential home buyers to expect to pay less for properties.
"There's a tug-of-war going on between buyers and sellers," Cusson Leung, a Hong Kong-based analyst at Credit Suisse, said in an interview. "With the outlook for the economies of both Hong Kong and China's mainland still uncertain, buyers' future price expectations could continue to fall."
The number of Hong Kong home transactions in August fell 54 percent from a year earlier and 28.9 percent from July to 5,284, according to the Land Registry statement.
Home prices in the city fell 4.4 percent between the end of June and August, according to figures from Centaline Property Agency.
Home values have tracked Hong Kong's economy, peaking in the second quarter of 1997, then crashing in the Asian financial crisis, leaving many homes worth less then their mortgages for years. The 2000 dot-com bubble burst, the September 11, 2001, terrorist attacks and the 2003 severe acute respiratory syndrome epidemic caused prices to fall as much as 70 percent from the peak.
The rebound started in late 2003 and prices doubled in the next four years.