Prior to the Federal Reserve Board’s (Fed's) interest rate cut, the market estimated that the property market would bottom out and rebound after the rate cut. When the Fed's interest rate cut took effect in September 18, Hong Kong banks immediately announced that they would cut the interest rate by a quarter of one percent in response.
Unexpectedly, this good news did not boost up the property market. In reverse, the transactions of the top ten housing estates between Saturday and Sunday decreased sharply, and it indicated that the property market has been formally entered the third phase of the bear market.
This interest rate cut is regarded as a last resort to save the property market. However, the market response was even out of expectation of the most pessimistic experts. They anticipated that a powerless rebound would last one or two weeks. However, the fact was not as presumption. It revealed that the market conditions were worse than the gloomy experts can expect.
When the interest rate cut was not effective, Sun Hung Kai Properties reacted immediately and announced that Kai Tak's Cullinan 
Sky will be opened for sale below development costing. The land price per square foot (psf) of this project is about HK$17,776, but the average selling price is only HK$19,668 psf. If the construction costs and interests are included to calculate, the minimum loss of per square foot is approximately HK$ 6,000.
SHKP will not give a second thought to slash the sales price of this project even its original position is a luxurious Kai Tak harbor-view residence. SHKP's new selling strategy is fundamentally changed from its previous high-price tactics. As SHKP is consistently to put new projects on sale every month, it means that there will have new low price’s projects on sale in different district time by time. As a result, the first-hand properties market will be bombarded constantly by this price strategy until it is collapsed.
Cheung Kong has previously stated that it will announce sales arrangements for its Kai Tak projects in October. However, SHKP successfully initiated the price war earlier, and Cheung Kong, which is accustomed to adopting a low-price strategy, will inevitably reduce its new project’s prices further in October. The market estimates that the opening prices are between HK$15,000 and $17,000 psf, setting a new low for first-hand properties in the region.
At present, the two largest developers in the market will take a turn to splash their projects’ selling prices consistently, the other small and medium-sized developers have no choice but to follow their price strategy. Indeed, it is highly possible that the property prices will plummet by ten percent more before the end of this year. The property prices of the third phase of bear market will eventually be adjusted by more than twenty percent in coming years.
