In case there is still any doubt as to whether Hong Kong property prices are heading down, it can be assuaged by news that property developers have started to pay much higher commissions to agents selling their new properties. In some cases the rate has doubled from 2 per cent to 4 per cent. Hong Kong property developers don't hand out money without reason.
In general it appears that residential property prices are falling by about 10 per cent, with indications that office prices may be falling more sharply. The Centaline Property agency says that, at the beginning of this month, residential prices registered their biggest drop in 17 weeks and that sales volumes had been cut in half.
So, is this a temporary market blip or the start of a more sustained and profound price decline? The government and its best friends in the property development world would have us believe that this is an orderly decline that should not provoke concern. The problem with this sanguine view is that it belies Hong Kong's history of property price movements.
We are coming off a period of steady but profound price increases that took residential property prices up by around 70 per cent in less than three years following the price collapse of September 2008. But even this rise failed to reach the heady levels of 1997, which ended with the even larger collapse of 1998, dropping prices for five years.
The local market has a history of finding peaks then rapidly retreating from them. This is set to repeat as the price conditions that prevailed until the middle of this year turned into a sudden decline.
Hong Kong's property market tends to be more volatile than those of other developed regions, not least because, even in the residential sector, owner-occupiers are frequently tempted into joining the ranks of speculators and trading their homes for profit.