Entering July, the property market remained weak, with transaction volumes continuing to decline. Some agents initially attributed the slowdown to rainy weather and later suggested that the World Cup had diverted buyers’ attention. Despite the weakening data, they continued to argue that the market was still on an upward trajectory in an effort to justify their optimistic assessments.
In reality, the central government’s unexpected announcement last month of measures to curb stock market speculation 
significantly changed market sentiment. Prospective homebuyers quickly stepped back from the market, while landlords in the secondary market also became more cautious. This shift led to an immediate slowdown in transactions.
Over the past year, many agents have been encouraged by the removal of property-market cooling measures and by expectations of increased liquidity. They promoted the view that underlying demand remained strong, and some even predicted that property prices would rise by 20% within one year and by 80% within five years. However, these highly optimistic forecasts were undermined by the sudden introduction of restrictions on capital flows.
Faced with this unexpected policy shift and concerned about negative reactions, some agents continued to insist that falling transaction volumes did not indicate a weakening market. Misjudgments by agents and market commentators are not unusual, but earlier acknowledgement of these errors could have helped the market adjust more efficiently. If agents had provided homeowners with a more accurate assessment of market conditions, some sellers might have lowered their asking prices, potentially supporting recovery in transaction volumes.
Instead, many agents maintained a bullish outlook, and numerous homeowners, influenced by that view, continued to list their properties at unrealistically high prices. As a result, weekend transactions across the ten major housing estates fell for five consecutive weeks, reaching only three to eight transactions per week. Such low transaction levels have inevitably reduced agency revenues.
Ultimately, the profitability of agencies depends more on transaction volume than on sustaining a permanent narrative of rising property prices. In the age of artificial intelligence, buyers and sellers can increasingly use AI tools to analyze property-market trends and form more objective views than those offered by persistently optimistic traditional commentators. Agents that adjust their analysis in line with changing market conditions, rather than simply promoting a bullish narrative, are more likely to earn trust and attract business.
