How to burn $6 million in 10 days in Hong Kong's housing market

A view of Victoria Harbour and downtown skyline is seen from the Peak in Hong Kong, on Aug 4, 2017.
A view of Victoria Harbour and downtown skyline is seen from the Peak in Hong Kong, on Aug 4, 2017.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - A mystery buyer has forfeited a HK$36 million (S$6.2 million) deposit after walking away from plans to buy a home in Hong Kong's most prestigious neighbourhood.

The sale fell through just 10 days after the unidentified person agreed to buy the three-bedroom house with a swimming pool and private garden in Mount Nicholson on the Peak for HK$722 million, according to a government document.

A house in the same development last year sold for almost HK$1.4 billion, making it Asia's most expensive property on a per sq ft basis.

Since then, an almost 15-year bull run that made Hong Kong infamous for having the world's least affordable property market has petered out. Fallout from the United States-China trade war, rising borrowing costs and a volatile stock market have weighed on home prices, which are down about 8 per cent from their August peak.

The slump may worsen, with Capital Economics forecasting home prices will fall about 30 per cent over the next five years, including a 15 per cent slump in 2019, according to a note published on Thursday (Jan 10).