Property Market and Housing The property market has shown signs of a gradual recovery since the low of November 1998 after more than a year of adjustment. The government's land auction on April 20, 1999 - the first since a moratorium on land sales was introduced in June 1998 - attracted good buyer interest. The three sites on offer were sold for HK$1.49 billion (US$191 million), about 20% to 30% above market expectations. Despite rising unemployment and the economic downturn, the property market remains in reasonable shape, helped recently by falling interest rates, strong user demand and a cautious pricing strategy by developers. Sales in the primary market have been good. By April 1999, prices for selected residential developments in the secondary market were about 43% lower than October 1997, but had recovered 12% to 17% from the trough in November 1998. Residential rentals in the first quarter of 1999 were about 20% cheaper than a year earlier and about 30% lower than the peak in the third quarter of 1997. Prices and rentals for offices dropped considerably in 1998. By the end of March 1999, prices had dropped by about 45% while rentals had dropped about 29% as compared to December 1997. The fall in office rental and prices has lowered business operating costs, boosting Hong Kong's competitiveness as a regional hub. Last updated: June 1999