Recently, there have been many reports relating to financially distressed real estate companies defaulting on their loans. The public is concerned about their debt ratios and the negative impact on the market if their unsold units turn out to be foreclosure properties in the near future. However, for ordinary citizens, these financially distressed companies will inevitably slash the prices of their unsold first-hand properties in order to cash out as soon as possible. As a general buyer, you should wait for those companies to reduce the prices of their unsold units by more than 70% off.
Financially distressed companies will surely increase the discount rate for selling their properties soon. In general, the price of per square foot (psf) in No. 9 Queen's Road Central, which is a Grade A office in Central, fell to HK$18,500 (down 70% from the record high), the price of Harbor Crystal Centre, which is a Grade B office in Tsim Sha Tsui East, fell to HK$3,600 psf (down 71% ), the price of Jone Mult Industrial Building in Kwun Tong dropped to HK$2,150 psf (down 65% ). The residential units of Ocean Camion in So Kwun Wat, its price reduced by 51% to Hk$ 7837 psf. Overall, the magnitude of decline of offices, shops and residential properties was between 51% to 71%.
As the more debt-ridden real estate companies have been exposed, the substantial number of premises they hold will inevitably be forced to sell in public at discounted prices to attract customers. Under the pressure of calling loans from mortgaged banks, the deep cutting-price by 50 % off is a new normal.
Due to the sales market of those premises in cutthroat competition, the price reduction is bound to a higher position between 70 to 80%. Therefore, buyers who are interested in bargain sales should target those properties and wait for two to three months. 
After the price reduction reaches the target range, buyers can buy the dip for their trophy premises.
As the asset prices drop by 60% to 70%, half of the financially troubled companies will go bankrupt, and several banks may also face financial difficulties. It is hoped that the relevant government departments will have a contingency plan to manage such dire financial crises deriving from the great drop of asset depreciation.
