Hong Kong’s residential market sentiment remained weak in September 2011 according to Knight Frank’s latest research report, due to the negative economic news from Europe and the US and a somewhat volatile global stock market.

Mr Thomas Lam Ho Man, Head of Research at Knight Frank in Greater China, said: “Although the government announced in the Policy Address that it will launch a new Home Ownership Scheme and supply more land for private housing, the problem of housing shortage would not be solved in the short term. Unless the sovereign debt crisis in Europe severely worsens, home prices will see minor adjustments by the end of the year.”

Homeowners were lowering their asking prices marginally which caused a fall in secondary residential prices. However, the correction in luxury residential market narrowed on a month-on-month basis that the fall in prices narrowed to 0.5% from 2.0% in August. On the leasing front, some landlords agreed to lower their asking rents in order to secure tenants quickly, causing a slight downward adjustment in luxury rents of 1.7%.