The long-awaited withdrawal of the cooling measures has caused a positive impact to the property market. Two months later, the first-hand market enjoyed most of the benefit from the removal of the cooling measures. Nevertheless, the first-hand market has been performing less energetic than the initial period of the new policy. To speed up the pace of property sales, developers have no choice but slashing the sales prices significantly. As the cycle continues, the consistent declining of the property price is inevitable. 

Since the official removal of cooling measures on February 28, the new flats sales surged to record- breaking high in recent years. Property developers got mounting sales by reducing the new flats prices immensely. The lifting the prolonged cooling measures drew the end-users and investors coming back to the market in the initial stage of the new policy. The overwhelming sales of new flats sucked all the potential buyers out of the market quickly. When the absorption rate was slowing down, property developers did need to cut the prices further to maintain the speed of property sales. This vicious cycle triggered the price reduction consistently. 

A month later of lifting the cooling measures, many new flats would not sell more than 70％ in the first date of the second round of opening sales. Most of these new flats were oversubscribed by more than fifty to seventy times during the period of opening offer and the number of subscriptions were over ten thousand. But the first date sale is barely over 100 units. As a result, the sales prices of new projects decreased to lower than that of second-hand properties in the same area. Even though the new flats prices were lower than second- hand properties, the absorption rate still were unsatisfactory. To get rid of the remaining units of new projects, the developers must reduce the new flat prices further. In this scenario, the price war had lowered new project’s price 30 to 40%. 

The first-hand property prices were reduced to lower than the second-hand property prices, and the second-hand properties prices had to be reduced in return. Until now, the second-hand properties prices have been reduced to lower than before the revocation of cooling measures. Landlords, who did not sell their second-hand properties in the early stage of the removal of the cooling measures, were missed out the best time to sell. 

The price war keeps on going. The first-hand units sold at the beginning of the month, and it may become negative equity at the end of the same month. If home buyers had bought a high price flat, there is a solid reason for them to forfeit the deposits paid. If so, the developer will take back the units and resell it again. This cycle keeps on going and it is the new normal of the property market.