Official government data released Wednesday showed that private home prices in Hong Kong fell 3.3% in November, marking the first annual drop in one of the most unaffordable markets in the world, since 2008.

Rising mortgage costs and a weak economic outlook combined with a serious Covid-19 outbreak at the beginning of the year to weigh down prices in the Asian financial hub for the year.

Over the first 11 months of the year home prices in Hong Kong have fallen 13.8%. The new reading comes after prices fell by a revised 2.7% in October.

Property agents note that although it appears the transaction volume for the year will drop to a decade low, they are optimistic it may rebound next year once authorities lift travel restrictions with Mainland China.

Cushman & Wakefield, a real estate consultancy, says it predicts home prices in 2023 will be down as much as 5%, however it sees prices stabilizing in the second half, once interest rates peak.

JLL, another real estate consultancy, says it predicts a price drop of roughly 10% next year for the mass market. It notes there is a high level of developer inventory due to units going unsold this year, and that will force developers to offer discounts.

It noted some recently launched projects were already priced 7% to 13% lower than the average price in the same area for the secondary market.

CK Asset Holdings, which is owned by the richest man in the city, Li Ka-shing, won a land plot for residential development last week for a price far below market expectations. Surveyors noted the price was equal to an eight year low for that location.