Last month, hedge fund manager Kyle Bass declared that the Hong Kong property market was in “free fall” and in a worse position than before the 1997 crisis.

Speaking at the SkyBridge Alternatives Conference in Las Vegas, he said the credit expansion in emerging Southeast Asian markets cannot continue. Mr. Bass, who is raising funds to bet on the country, cited the slowing Chinese economy as a main cause for declining Hong Kong property prices, with sales at a 25-year low.

But Denis Ma, Head of Research at JLL Hong Kong says it is more a case of market correction.

“'Free fall' is probably a bit severe.”

“Will the market come down like a house of cards? Probably not,” he said.

But Mr. Ma acknowledges that the Hong Kong property market is experiencing a decline in house prices.

“Our own in-house data has shown that mass residential property prices have declined 10.5 per cent since peaking in September 2015. That is pretty modest by Hong Kong standards in a market where housing prices can halve over a 12-month period,” he said. Housing prices could still drop by another 20-25 per cent before bottoming out, and Mr. Ma predicts that this will take place over a 2-3 year window.

It’s not all bad news, though; housing prices at the highest end of the market have remained steady.

“While there is plenty of evidence showing price declines in the affordable luxury (circa HKD 20-50 million) and mass residential property markets, the ultra-luxury segment continues to be holding up,” Mr. Ma said.

While foreign buyers are often deterred by a 15 per cent Buyers’ Stamp Duty levied on all properties bought by non-locals, Mr. Ma offered some advice for those looking to buy in the Hong Kong market.

“(The) biggest discounts are available in the primary market...in areas with a large amount of upcoming supply. In the mass market, that means districts such as Tseung Kwan O and Yuen Long. In the affordable luxury market, districts such as Homantin in Kowloon and Mid-Levels West on Hong Kong Island will offer the best opportunities,” he said.

Ultimately, Mr. Ma said investing in Hong Kong property was a waiting game.

“...the market still has a bit more to go before it reaches the bottom so it’s probably worth waiting for a little longer. At the end of the day, Hong Kong is a cycle-tested market and provided you have the holding power, most investments will be profitable over the long-run,” he said.

For more on Hong Kong:

New frontiers in emerging property markets

How to buy property in Hong Kong​

How much do you need to buy an apartment in Asia?