The number of forfeited properties offered by banks for private auction is likely to reach a new peak in the next three months and result in a further decline in property prices, a property auctioneer says. Chung Sen Auctioneers director Tsang Kin-chun said the company was receiving a growing number of bank orders to dispose of properties forfeited for resale. Mr Tsang said Chung Sen had auctioned 492 residential, commercial and retail properties since the start of the year. They were offered mainly by owners who were pessimistic about the property sector. The firm had auctioned 147 properties offered by banks, mainly in March and April, and had received 85 bank orders in the past two months, compared with 41 cases in the same period of last year. But Mr Tsang said the worst was yet to come. The impact of defaults by investors, hit by the property downturn since October, would be seen in July and August, as banks usually took nine months to complete the process of seeking forfeiture, he said. As many luxury-property investors were hit by the economic turmoil, the value of individual forfeited properties could $10 million or more. The expected increase in defaults could result in a further decline in property prices, Mr Tsang said. Residential and commercial property prices have fallen more than 40 per cent since peaking in mid-1997. Property activity also showed signs of sliding after enjoying a short-lived recovery at the start of the year.