Hong Kong Property Market Slumps Further In May

by Mary Swire, Tax-News.com, Hong Kong

05 June 2003

Figures released by the Hong Kong government for last month have revealed a dramatic slowdown in the local property market as the number of transactions slumped.

According to the Land Registry statistics, 5,090 sale and purchase agreements were registered in May, which is 20.2% lower than April, and nearly 40% lower than May 2002. In monetary terms, those deals were worth HK$9.4 billion in May, representing a 26.9% decline since April, and a 53.8% fall over the past year.

Land values in Hong Kong have undergone a sustained slump since the Asian financial crisis of 1997/98, and prices have fallen by about 60% during this time. Consequently, the government has attempted to prop up prices by halting sales of its own land.

The Land Registry's report neglects to mention whether the recent SARS outbreak has contributed to the latest decline, although given that the virus has affected most sectors of the Hong Kong economy, particularly retail, one could conclude that this was a factor in the May statistics.

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