Hong Kong’s official home price index ended a 19-month rally in October with small units in the New Territories seeing the largest fall. Analysts expect worse to come. The Rating and Valuation Department’s monthly supplement, released on Friday, showed the general price index for private homes retreated 1.11 per cent month on month to 302.6 in October after peaking in September. Since the start of the year the index is up 7.5 per cent. “Home prices will continue to head for a downward trend and investors have not felt the pain yet,” said Alfred Lau, a property analyst at Bocom International. He estimated home prices could fall as much as 20 per cent once interest rates rose, with 15,000 private housing units being delivered to buyers this year. The government data indicates flats smaller than 40 square metres (430 sq ft) in the New Territories registered the largest fall of 5.43 per cent from September to October to an average price of about HK$9,470 per square foot. Home prices will likely fall further without the support of a high rent rate Buggle Lau, Midland Realty A 442 sq ft flat at Kingswood Villa, the largest private housing estate in Tin Shui Wai, changed hands for HK$3.25 million. The price tag represents a nearly 20 per cent fall in three months, according to agents. Many Wells Property Agent, focused on flats in Tuen Mun, said its Tuen Mun home price index had plunged 17.3 per cent since September, compared with a 10 per cent fall in urban areas. A 300 sq ft flat at the 29-year-old Siu Hei Court housing estate in Tuen Mun, under the Home Ownership Scheme, recently sold for HK$2.57 million, the lowest price since late last year. Buggle Lau, chief analyst at agent Midland Realty, said October price index marked the largest fall in a single month over the past four years. The average home price in Hong Kong was HK$10,487 per sq ft based on saleable area last month, Lau said. After rising 6 per cent from January, the Rating and Valuation’s rental index fell 0.95 per cent month on month to 175.7 in October . “Home prices will likely fall further without the support of a high rent rate,” Lau said. With more projects due for delivery to home buyers over the next several months, he the supply of rental flats would also increase. A 346 sq ft unit at The Avenue in Wan Chai recently leased for a record low of HK$15,000 a month, according to Centaline Property Agency. Joe Lee, deputy sales manager at Centaline Property Agency’s Wan Chai branch, said there were 450 units offered for rent in the project. “It is probably the largest supply of flats for leasing in a single new project since the 1980s,” he said. “Rents in the project will not only be under downward adjustment pressure but also older flats in the nearby area.” The leasing market in Wan Chai was dominated by expatriates with a budget of HK$15,000 to HK$25,000 for units from 300 to 400 sq ft, he said. With an influx of supply from The Avenue, he said owners of older flats would be forced to cut their asking rents in order to find tenants.