Residential prices and rents, hit by the global financial crisis, recorded their biggest quarter-on-quarter drop in a decade during the last four months of last year, according to the Rating and Valuation Department.

The annual property review by the department shows selling prices of mass residential units dropped 12.1% in the fourth quarter from the third quarter. The prices of luxury units fell 15.7% during the same period.

Rental prices in the mass residential market slumped 11.5%, while rents of luxury properties dropped 10.9%.

The declines were the most significant since the fourth quarter of 1998 and were even worse than during the dotcom crash in 2000 and the Sars outbreak in 2003. However, unlike the property market after the start of the Asian financial crisis in 1997, the new supply of residential properties is limited.

South China Morning Post