I just dug this old gem up from April 2007. Looking back I'm surprised how spot on it was.History tends to repeat, but I don't think a correction of that size will happen anytime soon, as rental yields are currently pretty attractive relative to interest rates, which makes property an attractive investment.
The risks as I see them are interest rates going up, which is certainly going to happen soon, although I think it will be limited thanks to the US. By this I mean that the US cannot afford to increase interest too much or they're going to go into a nasty recession. Since the HK dollar is pegged, it means there will always be a source of cheap capital flowing into Hong Kong. A few percentage points of increase is certainly possible, but I don't think the US can afford more than that.
The other risk is that the economy runs into trouble, as in 97, leading to increased unemployment and higher vacancy rates / lower rental yield.
I'm not really sure what a down-turn in the US will mean for Hong Kong, and how much growth in China will help to support HK in the event of a US down-turn.
On another note, a few people commented that there are markets within markets. Although property as a whole may go down, growth within certain areas may still offset the overall downward trend.
Which brings me back to K-town. I think this area has a lot of potential. The question is how severe any variations in rent / interest rates will be over the coming years and whether I have enough cash to ride them out.