Residential housing prices have risen by 28 percent so far this year in the city. [China Daily]

Upmarket realty in Hong Kong is sizzling hot with prices of two luxury apartments scaling the HK$300-million (US$39 million) mark each recently.

According to industry markets, the pricey realty clearly shows that cash-rich mainlanders continue to repose faith in the city's real estate market.

The city's biggest developer, Sung Hun Kai Properties, has set an asking price 20 percent or HK$50 million more than the previous record price for its Glorious units.

The two three-storey apartments are situated at the 270-m twin towers, the tallest residential buildings in Hong Kong.

The record price comes a few days after a one-bedroom flat in the Masterpiece, another luxury development, fetched HK$24.5 million, or HK$30,025 per sq foot, a record for a one-bedroom flat.

Target buyers included investors from the mainland and wealthy buyers from Hong Kong and overseas, according to Sun Hung Kai Real Estate Agency.

Mainland buyers make up almost half the buyers of luxury units in Hong Kong. Sino Land, another real estate developer in the city, said mainland investors bought five out of 10 flats sold last week in its new project.

Mainland investors who have weathered the financial storm are the triggers for Hong Kong's current property rebound, according to researchers at Centaline Property Agency.

Despite the skyrocketing prices of luxury properties, industry analysts in Hong Kong said the luxury market which is still a minority, will not have any significant impacts on the mass market as the latter is driven by actual demand.

Hong Kong's home prices have climbed 28 percent so far this year.

Part of the reasons behind the house-purchasing bandwagon is Hong Kong's immigration policy, according to which individuals who invested a certain amount of capital in Hong Kong's property or financial market can qualify as permanent residents.

According to the Immigration Department of Hong Kong, over one-fourth of the investment immigrants opted for property as investment tool this year while investment immigrant applications have soared by 64 percent till now compared to the same period last year.

The abundant liquidity from across borders, the weakening of the Hong Kong dollar against the renminbi and the buoyant mainland economy are the other factors driving Hong Kong's luxury property market.

(China Daily September 20, 2009)