The demand of houses has declined in Hong Kong Island, however the demand for houses in New Territory, a much more affordable region in Hong Kong, has increased. As a result, price of houses in Hong Kong Island had declined in September 2018, the first time since March 2016.
The city’s Rating and Valuation Index, which tracks the prices of used homes, dropped by 0.6 point to 393.9 last month, from 394.2 a month earlier.
This economic phenomena can be explained by the graph below.
When the demand for the good decreases, the demand curve shifts to the left. Thus the price decreases from P1 to P2 for the same quantity demanded.