Buyers disregarded those concerns and 249 sales were recorded in the 50 housing estates monitored by Ricacorp Properties from July 9 to 15 - up 31 per cent on the 190 deals concluded in the previous week.

But Cusson Leung Kai-tong, an equity analyst at investment bank Credit Suisse, said he did not think the rebound was sustainable.

'The unemployment rate will increase in the second half following the slowdown in the economy, in retail sales and exports. That will dampen people's interest in buying a home,' he said.

Buyer sentiment was positive last week, however, and the Ricacorp data showed a strong rebound in sales, led by gains on Hong Kong Island, where 38 deals were concluded in the nine major estates, up from 23 the previous week. Taikoo Shing, Kornhill and Nan Fung Sun Chuen in Quarry Bay performed the best, with a total of 25 flats at the three estates changing hands, up threefold on the eight deals a week earlier.

Patrick Tsang, a director at Centaline Property in Island East, said the boost to sales coincided with the start of the school holidays.

'Traditionally, July and August is the peak season for the property market. Also, new projects such as The Beaumount in Tseung Kwan O and High West in Sai Ying Pun recorded strong sales and this encouraged home seekers and investors to buy flats,' he said.

Tsang believes the negative signals sent by the results of the land auctions have not discouraged buyers, as they were cash-rich and looking for investments to hedge against inflation. 'We have seen long-term investors return to the market recently. Four out of the 16 deals recorded this month involved sales with tenancy leases to investors,' he said.

Eric Yuen Chi-fung, head of research at brokerage house Guoco Capital, said investors had returned to the market recently because they believed the new government led by Chief Executive Leung Chun-ying was unlikely to release new housing policies in the short term. 'The government has to handle other critical issues,' he said.

According to Guoco, 35,600 flats were sold in the secondary market in the first half, down 28 per cent on the same period last year. The combined value was down 23 per cent at HK$160 billion. 'The global economy will turn weak in the second half and investors will hesitate to buy flats. So I believe sales will be down in the second half, although prices will not drop under the low-interest-rate environment,' Yuen said.

Alva To, head of consulting in North Asia for consultancy DTZ, said market sentiment could weaken again due to global developments in the next quarter, and this could weigh on sales. 'However, solid end-user demand is expected to save the market from a drastic price correction.'

28%

The year-on-year drop in sales of homes in Hong Kong's secondary market in the first half of the year