With the return of home buyers to the market and the improved local economy, the realtors said the upbeat momentum would continue and predicted transactions this year would bounce back to 1998's level of more than 110,000 deals.

That year, 111,489 transactions were lodged with the Land Registry. More than 85 per cent of last year's property transactions involved home sales.

Cheung Kong (Holdings) said it sold property worth $18 billion last year and it expected the momentum would continue this year.

On Thursday, Wharf (Holdings) said its property sales last year had exceeded the original forecast of $3.5 billion to $5.3 billion.

Waning home-buyer confidence, poor economic conditions and the unexpected Sars outbreak in the first half left Hong Kong developers facing their most challenging time since the market crash in 1998.

'Property sales and prices hit bottom in the first half but the introduction of economic boosters [by China and Hong Kong] and the improved economy have made the property market turn around,' said Centaline Property Agency senior research and marketing manager Wong Leung-sing.

The economic sweeteners include the introduction of the closer economic partnership arrangement, the relaxation of individual travel from the mainland to Hong Kong and the Capital Investment Entrant Scheme.

Mr Wong said 35,200 transactions were registered in the first half, 26.4 per cent down from the same period in 2002.

'But transaction numbers in the second half rose 36.6 per cent to 52,081 deals, compared with 38,123 deals registered in the second half of 2002,' he said.

Midland Realty chief analyst Buggle Lau Ka-fai said sales of primary residential units were estimated at 27,378 deals, up 3.4 per cent from 2002.

However, sales of secondary flats last year were 4.1 per cent down on 2002 at 46,131 deals, according to Mr Lau.

Compared with home sales, retail shops, office and industrial properties saw a bigger improvement with transaction activity up 21.2 per cent on 2002, he said.