HONG KONG, CHINA - Property prices at Hong Kong's most prestigious location -- Victoria Peak -- plunged 41.4 percent in the last quarter of 2008, a consultant group said Wednesday.

The percentage drop compared to the third quarter was the largest for any luxury residential areas on Hong Kong island, CB Richard Ellis said in its report.

The plunge in prices at the scenic location, perched above the skyscrapers of Hong Kong and a favourite for the city's wealthy elite, was blamed on collapsing confidence during the economic downturn.

"Hong Kong's economy has decelerated markedly in the fourth quarter as investment sentiment and consumer confidence plummeted significantly due to the global credit crunch, striking a hard hit towards the property market," the report said.

Property prices for all luxury properties on Hong Kong Island fell 35.4 percent in the final quarter, the report found.

The fall was also the biggest on record in Hong Kong's luxury real estate market, even worse than during the Asian financial crisis in 1997-1998, according to the South China Morning Post.

The total number of transactions worth 10 million Hong Kong dollars (1.28 million US) in Hong Kong amounted to only 575 in the fourth quarter last year, compared to 2,807 transactions over the same period in 2007, CBRE said.

In October, a 3,300-square-foot (307-square-metre) house on The Peak was sold to cartoonist Ma Wing-shing for 76 million Hong Kong dollars (9.74 million US), less than half its asking price.

The original owner bought the property in 2006 for 90 million dollars. -AFP