Amid the global financial turmoil and associated property downturn, London is perhaps one of the few remaining bright spots. Investment funds pour into this financial hub, now a safe haven for capital from all over the world. The rollercoaster ride of the worldwide equity markets stemming from the Euro crisis has sent shockwaves through most western economies – and caused jitters in Asia as well, resulting in the withdrawal of capital, some of which is finding its way into mature, stable real estate markets like London.

The Euro debt crisis continues without any sign of abating. After some stunning twists and turns, Greece has finally agreed to the salvage plan offered by the EU. But just when EU heads are breathing a sigh of relief, Italy with its worsening debt situation is poised to drag the EU into another round of chaos. Spain and Portugal fare no better; the Euro debt crisis seems to have no end in sight. This has dealt a blow to a weak US economy, which was showing signs of a mild and slow recovery.

The Hong Kong stock market in the last four weeks has seen one of the most turbulent periods in its history. The Hang Seng Index has stunned the market with rollercoaster rides since early September, plummeting almost 20 per cent from over 20,000 to 16,250 before bouncing back marginally.

The land auction yesterday returned worrying results. While the two lots of land in Yuen Long and Sai Kung were sold within prior price expectations, which had been generally adjusted downward by 10 per cent just before the auction, the larger lot at Junk Bay fetched a price below all predictions. If the theory that government land auctions reveal what the developers truly think about market prospects is anything to go by, the picture is once again confirmed to be on the dark side.

The proliferation of unauthorised structures in Hong Kong has its root in a combination of physical, cultural, economical and legal causes, as explained in last month’s Market Watch. But the main cause stems from a lack of execution of Building Regulations and Building Orders and the fact that, despite the registration of a building order, nothing stops a sales transaction from proceeding should the seller and buyer so decide.