Updated April 2026

Mastering the Comparative Market Analysis (CMA) for the Hong Kong Salesperson Exam

Last updated: April 2026

For prospective real estate agents in Hong Kong, understanding how to accurately price a property is one of the most critical skills you can develop. A Comparative Market Analysis (CMA) is the primary tool agents use to estimate a property's market value. Whether you are representing a vendor (seller) trying to set a competitive asking price, or a purchaser (buyer) formulating a strong offer, mastering the CMA is essential for passing the Estate Agents Authority (EAA) licensing exam. For a broader overview of exam topics, be sure to check out our Complete Hong Kong Salesperson Exam Exam Guide.

In this guide, we will break down the mechanics of a CMA, specific Hong Kong regulatory requirements, and the adjustments necessary to provide accurate property valuations in one of the world's most dynamic real estate markets.

What is a Comparative Market Analysis (CMA)?

A Comparative Market Analysis (CMA) is an evaluation of similar, recently sold properties (known as "comparables" or "comps") in the same geographic area to determine the estimated market value of a subject property. It is important to note for the EAA exam that a CMA is an estimate of market value provided by a licensed estate agent, not a formal valuation report. Formal valuations in Hong Kong can only be issued by registered professional surveyors (such as members of the Hong Kong Institute of Surveyors - HKIS) or bank valuation departments.

Crucial Hong Kong Specifics for CMA

Conducting a CMA in Hong Kong requires knowledge of local market quirks and strict EAA regulations. Exam candidates must be intimately familiar with the following factors:

1. The Saleable Area (SA) Mandate

Since January 2013, the EAA has mandated that estate agents must use Saleable Area (SA) rather than Gross Floor Area (GFA) when quoting the floor area and price per square foot/meter for second-hand residential properties. Saleable Area measures the actual usable space of the unit, including balconies and utility platforms, but excluding common areas like lift lobbies and staircases. Failing to base your CMA and marketing materials on SA for residential properties is a direct violation of EAA practice circulars.

2. Floor Level and View Premiums

Hong Kong is a vertical city, and pricing varies wildly within the exact same building. A unit on the 40th floor with a panoramic Victoria Harbour view will command a significantly higher price than an identical unit on the 4th floor facing a brick wall. When selecting comps, agents must make strict adjustments for these variations.

3. Unlucky Properties (Hung Chak)

In Hong Kong, properties where unnatural deaths (such as murders or suicides) have occurred are colloquially known as "Hung Chak" (haunted flats). These properties typically sell at a steep discount—often 15% to 30% below market value. If a comparable property is a known Hung Chak, it must be heavily adjusted or excluded from the CMA to avoid skewing the data.

Step-by-Step CMA Process for Real Estate Agents

To perform an accurate CMA, agents follow a systematic approach. The exam often tests your understanding of this logical sequence.

Step 1: Define the Subject Property

Gather all factual data about the property you are evaluating. This includes conducting a search at the Land Registry to confirm ownership, property age, Saleable Area, and checking for any encumbrances like building orders or illegal structures (UBW - Unauthorized Building Works).

Step 2: Select the Comparables

Identify 3 to 5 comparable properties. Ideal comparables should meet the following criteria:

  • Location: Same housing estate, preferably the same phase or block.
  • Timeframe: Sold within the last 3 to 6 months. (Data can be sourced from the E-Memorial Form system or the Land Registry's EPRS).
  • Size: Within a 10% variance in Saleable Area.

Step 3: Make Adjustments

Because no two properties are exactly identical, you must adjust the sold prices of the comparables to match the subject property. If the comparable has a superior feature, you subtract value from the comparable. If the comparable has an inferior feature, you add value to it.

Common CMA Value Adjustments in Hong Kong (%)

EAA Regulatory Compliance and CMA

The EAA strictly monitors how agents present property prices. Providing a deliberately inflated CMA to win a listing (known as "buying a listing") or providing a deflated CMA to help an investor friend buy cheap is highly unethical and violates the EAA Code of Ethics. Agents must exercise due care and due diligence. For a deeper dive into EAA ethical guidelines, read our guide on real estate ethics and standards.

Furthermore, when discussing prices, agents must be careful not to engage in price-fixing or collusion with other agencies, which violates the First Conduct Rule of the Competition Ordinance. You can learn more about this in our overview of anti-trust laws in real estate.

Practical CMA Calculation Scenario

Let’s look at a hypothetical scenario you might encounter in your real estate practice or on the exam:

Subject Property: Taikoo Shing, 700 sq ft (Saleable Area), Mid-floor, Garden View.
Comparable 1: Taikoo Shing, 700 sq ft, High-floor, Garden View. Sold last month for HKD $12,000,000.

Adjustment Process:
Comparable 1 is on a higher floor than the Subject Property. In this specific block, high floors command a 5% premium over mid-floors. Because the Comparable is superior, we must adjust its price downward to match the Subject Property.
Adjustment: HKD $12,000,000 - 5% = HKD $11,400,000.

The estimated value of the Subject Property based on this comp is HKD $11.4 million. (For more complex mathematical frameworks required for the exam, review our guide on proration calculations step-by-step).

Frequently Asked Questions (FAQs)

1. Can a licensed estate agent issue a formal valuation report in Hong Kong?

No. A CMA provided by an estate agent is strictly an estimate of market value for marketing and negotiation purposes. Formal valuation reports, which are required for mortgage approvals, can only be issued by registered professional surveyors or bank valuation departments.

2. What is the difference between Gross Floor Area (GFA) and Saleable Area (SA) in a CMA?

GFA includes common areas like lobbies, staircases, and clubhouses apportioned to the unit, whereas SA strictly measures the usable space within the unit itself (including balconies). The EAA mandates that agents must use SA when quoting prices for second-hand residential properties.

3. Where do Hong Kong agents get reliable transaction data for comparables?

Agents source official transaction records from the Hong Kong Land Registry. This data is often accessed through the Land Registry's Electronic Search Services or via proprietary databases maintained by major real estate agencies that compile registered E-Memorial forms.

4. How does a "Hung Chak" (haunted flat) affect a CMA?

A property where an unnatural death has occurred carries a heavy cultural stigma in Hong Kong and is notoriously difficult to finance, as banks often refuse to value them. They typically sell at a 15% to 30% discount. Agents must disclose this fact if known, and heavily adjust their CMA accordingly.

5. Are CMA rules different for commercial properties in Hong Kong?

Yes. While the EAA strictly mandates the use of Saleable Area (SA) for residential properties, Gross Floor Area (GFA) is still widely used and legally permissible when conducting CMAs and marketing commercial, industrial, and retail properties in Hong Kong.