The property market has come to a standstill, with demand for new homes plunging, leading to agencies shutting down offices, terminating staff or adopting contract or part-time arrangements with their agents.
According to government statistics, there were 75,000 residential property transactions in the first 10 months of the year, a drop of about 34 per cent on the same period last year.
Undersecretary for Transport and Housing Yau Shing-mu said the drop was a result of the special stamp duty introduced to curb short-term residential speculation.
Lee Wee-liat, regional property head at Samsung Securities, noted that buyers were becoming few and far between. He predicts that this trend will last for about six to 12 months. Lee added that even mainlanders - who are often counted on to support demand - might be having second thoughts when buying flats in Hong Kong as they became more cautious.
The drop in second-hand transactions echoes the declining demand for new homes. Centaline Property Agency has reported that the number of second-hand transactions in 10 of Hong Kong's biggest private developments has fallen 42 per cent from a week earlier.
Some say that second-hand transactions are as low as they were three years ago, when the financial crisis broke out.