The Hong Kong property market is expected to take a dive next year with property prices and sales predicted to decline.
Knight Frank, a property consultancy agency, has released its forecasts for the Hong Kong market in 2014 and expects to see transactions fall to 45,000-50,000 for the year.
This year saw sales reach between 52,000 and 55,000, but it is likely that the continuation of current cooling measures by the government will bring transactions down to a level not seen since 2003.
The consultancy has forecast that prime residential rental properties will also be affected and experience a drop between five per cent and ten per cent. According to scmp.com, the market will see a ten per cent drop in property prices due to the government's market-cooling measures.
Thomas Lan, director and head of research at Knight Frank's Hong Kong office, told propertywire.co.uk that the second half of 2014 is likely to see a more significant drop in house prices and property sales. The first half of the 2014 market will be supported by investors selling off property acquired this year.
Mr Lan said: "The market has turned and entered a downtrend. Residential prices will be heading south in the coming few years, but significant corrections are not expected amid a low mortgage rate environment."