In May, the overall transaction volume of the property market fell significantly, and developers had to expand the discounted rate of sales prices to 30% to stimulate sales volumes. The first-hand property had been sold at second-hand property prices. The sellers of the second-hand property must reduce the asking price further. Therefore, the cases of selling at losses and the negative equity will increase significantly. The latest data indicated that the number of negative equity cases in the first quarter increased by 27% to 32,000 cases.
If the current growth of negative equity cases remains at an average rate, the total number of negative equities will triple to more 
than 100,000 cases in the second quarter of next year. The total number will likely break the record in 2003. Since the debt amount of negative equity per case has reached HK$ 5 million in the first quarter of this year, it is expected that each case will continue to increase to more than HK$7 million as the property prices fall further, so it is estimated that a large number of negative equities’ landlords will be officially declared bankruptcy by the end of the year.
According to the present situation, it is predictable that a certain amount of “the favored child of heaven,” who used to be the outstanding entrepreneurs in the beauty, hotel, catering, property investment and various industries, will go bankrupt after the third quarter of this year. Until the end of this year, there is a great chance that property prices will decrease by another twenty percent.
In 2003, the number of negative equity cases rose to 100,000 cases, and property prices fell by sixty-five percent. Until the next year, the number of negative equity cases will break this historical record. It is possible that the property prices will fall forty to fifty percent. This year is a typical bankruptcy year, so it is crucial for both companies and individuals to stay alive by doing nothing.
