Property prices could plunge 30%

Property market on brink of first downturn since 1998.

British multinational banking and financial services firm Barclays plc predicts Hong Kong's property prices might be headed for a correction of as much as 30%.

Barclays expects home prices to drop by at least 30% by the end of 2015 with knock-on effects on commercial property forcing office prices down 20% and retail properties to zero growth.

Barclays cited factors such as stalled household income growth; supply exceeding demand; rents hitting the income ceiling and developers speeding up presales as among the reasons for its estimate.

The market consensus is for a property price correction of some 15% triggered by higher interest rates.

"With home prices up 111 percent since end-2008, we believe there is significant scope for owners to take profit on their property holdings," Barclays said.

The firm gavc the Hong Kong property sector a "negative" view and downgraded its Asia ex-Japan real estate industry view to "negative" from "neutral."