The world’s most expensive property market is finally slowing down.

Bloomberg reports that housing correction of as much as 15% in the world’s most expensive property market may take place in the first half of 2019 as monetary policy tightens and Chinese liquidity into Hong Kong recedes, according to Kenneth Gaw, president of Gaw Capital partners. 

“The Hong Kong market has been going up for the last 10, 15 years,” Gaw told Bloomberg. “With interest rates going up, less money coming in from China, I think, very possible, there is a correction.”

Gaw adds to the growing chorus of market analysts that have flagged concerns related to the sharp slowdown in the residential market as Nomura International expects home prices to fall 13% in 2019 and wipe out property gains which have surged 14% so far this year.

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Hong Kong’s heated property market appears to be showing signs of slowing down as home price growth has moderated slightly from peak levels in 2017 on the back of the government efforts to cool the market including taxing vacant properties. In fact, the growth of residential property prices have tapered off from 21.6% in June 2017 to 14.7% in May, according to BMI Research.

The number of home sales also fell 9% MoM to 6,093 sold units in July, according to real estate consultant Knight Frank, as buyers held back purchases to understand the full impact of the cooling measures.

“In light of the government intervention and external uncertainties, we expect home prices to grow at a slower rate in the second half of the year. Over the whole year though, residential prices are expected to increase between 10-13%,” added Knight Frank.

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