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Hong Kong's Property Boom at Risk With Stocks Flashing Warning Signs

  • Real estate prices highest relative to shares since 1998
  • ``We're just at the beginning of the correction cycle": Lau
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Hong Kong home prices are the highest relative to shares of the city’s publicly-traded developers in almost two decades. For Bocom International Holdings Co. analyst Alfred Lau, that’s a sign that the property market’s about to drop as much as 20 percent.

The Hang Seng Properties Index slumped 15 percent this quarter through last week, even as a gauge of Hong Kong housing prices compiled by Centaline Property Agency Ltd. rose to a record. The stock gauge is at the lowest compared with the real estate measure since 1998, when the city’s last property bubble was bursting.