Signs of a Hong Kong real estate bubble?

The price of residential properties in Hong Kong declined 3.8 percent since November, according to a report by the University of Hong Kong. 

This chart shows the price of residential property in Hong Kong since 1997. Since suffering through the Asian financial crisis in 1997, property prices rose sharply in 2010.

Today, the University of Hong Kong released their Hong Kong Residential Real Estate Series (HKU-REIS) indicating that, in December, the price of residential properties declined a notable 3.82% since November but still remained 7.87% above the level seen in December 2010.

It appears that after a stunning run of monthly increases that saw prices climb dramatically, prices are beginning to show a notable pullback with all measures declining on the month.

The HKU-REIS is a set of property price indices constructed monthly using a “modified” repeat-sale methodology similar to that of the S&P/Case-Shiller indices yet suited to the Hong Kong property market.

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