Luxury Property in Hong Kong – Prices Fall at Fastest Rate in Ten years

Hong Kong’s luxury property values fell at the fastest rate since the Asian financial crisis ten years ago, according to CB Richard Ellis. Prices on the Peak, Hong Kong’s most expensive area fell over 30% in the last quarter of 2008 compared to the same quarter 2007.

Both the Hong Kong and Chinese stock markets have fallen more than 60% since their 2007 peaks, bringing property prices down with them. Although Hong Kong has the second most expensive luxury real estate market in Asia, prices here are more volatile than almost anywhere in the world. Largely thanks to Hong Kong’s lack of regulations in the market place.

The downside of being the most free economy in the world – Hong Kong has been voted No.1 for economic freedom in the Heritage Foundation’s “economic freedom index,” for the last 12 years – is massive ups and downs in luxury property prices. Prices jumped 2007/early 2008 on the back of stock market rises, now they are on the way back down. More than any other city, Hong Kong luxury real estate is treated as a commodity and priced accordingly.