Real estate is the main game in Hong Kong, and as the drop in housing prices nears correction territory, concern is mounting about the toll the downturn will exact on the city's economy.

Hong Kong property values are diving, and the city is bracing for the impact. Credit:Bloomberg

Home values in the world's most expensive property market have fallen about 9 per cent from their August peak as the China-US trade war and potential rate hikes hurt consumer confidence. While the likes of JPMorgan Chase & Co. say prices will bottom this quarter, Jones Lang LaSalle Inc. says there's worse to come, forecasting home values will slump a further 15 per cent in 2019.

Here's what's at stake if the downturn worsens:

In a city where land is in short supply, the government is able to generate a large amount of revenue from selling vacant plots. Land sales were the biggest contributor to government coffers in the fiscal year ended March 2018.