Home prices drop to 4-1/2 year low

Triggered by fear of higher interest rates.

Centaline Property Agency Ltd., one of Hong Kong’s leading realtors, said the record fall in the week ended July 7 saw prices drop by 1.8%, the highest since November 2008.

Concerns interest rates will begin to rise if the U.S. Federal Reserve phases out its monetary easing program later this year were to blame for the easing. Centaline noted that local buyers are worried. They are also seeing some homeowners agreeing to cut prices in a very weak market.

Home transactions fell to the lowest since 1996 in the first half after the government doubled stamp duty taxes on property deals in February to suppress concerns that an asset bubble is forming.