Three months after the withdrawal of the cooling measures, the transaction volume and property prices of first- and second-hand properties have fallen to the level before the removal measures. In this situation, the industry's experts had strong confidence in the property market, and they believed that it would bottom out in coming months. Unfortunately, the reality was out of their expectation. In reality, the purchasing power had been sucked out rapidly, the speed of depletion was even out of the prediction of bearish experts.
The second rebounded wave of the property market ended; the third declining wave followed behind. Consequently, the property 
prices will be pushed down to a lower level before the end of this year. As expected, the first-hand property prices will be lowered by 15%, the second-hand property prices will also be reduced by 10% more. At the end of this year, the first-hand property price will decrease 40%, and the second-hand property will drop another 35% in total.
Until now, a number of users believe that the adjustment of property prices has been achieved, so they have been starting to purchase their target flats in the market. However, the rental yield return is approximately 4%, and it is significantly lower than the return of US dollar fixed deposit, which is 5% in general. Therefore, the rental yield return must rise to 6% so that it can attract the smart investors. In the other words, it means that the property prices may be adjusted down for another 25%. However, even if it is an end-user, it will be better to defer the plan to purchase the self-use property before mid of next year.
The declining property market has a negative impact to various industries, and it is an open secret that many developers are in financial difficulties, and one firm among these companies has debts of more than HK$ 60 billion. Until recently, this firm has not yet had any plans to restructure its debts. Now the property market starts to fall again, this company is still numb to the downturn market. Will it be survival in coming years; everyone will wait and see.
Small and medium-sized enterprises (SMEs)have been suffering from the loss of consumption power which has been moving to the adjacent city of Shenzhen. As a result, the rental prices of shops eventually fell in half, and a large amount of shop landlords were on the verge of bankruptcy. With the decreasing of foreign capital, the rental and transaction prices of office premises have fallen by more than 40%, the vacancy rate has risen to more than 15%, and the rental incoming of the big landlords has dropped significantly.
To the middle class, the market value of their self-use units decreased by 25%, and the net value of their assets, including their MPF and stocks investment, decreased by one third in total.
Please be aware that the worst moment is still ahead, and it is still uncertain when it will pass through, and the hard days will still last for a while, and I hope that the market adjustment will be completed before mid of the next year.
