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The decline of the Gibraltar pound, pegged to the sterling, is attracting Hong Kong investors to Britain's small Mediterranean territory.
Property prices are now 25 per cent lower as the currency has weakened considerably against the Hong Kong dollar. 
British estate agency Beauchamp Estates has received 15 inquiries from potential Hong Kong buyers since the start of this year for Admiralty House, a colonial-style, seven-bedroom residence.  
The cliff-face Georgian home, on offer for an undisclosed sum, boasts a swimming pool. 
According to Beauchamp Estates director Gary Hersham, buyers from across the globe are considering Admiralty House as the pound falls against major currencies, such as the euro and the United States dollar. 
'The Gibraltar pound is fixed to the sterling so buying power in dollars or euros is now greater,' Mr Hersham said.
According to Jeremy Boyd, director of estate agency Chesterton Gibraltar,   prices have fallen 10 per cent over the past 18 months from their peak in late 2007. 
With a population of only 30,000 and land area of 6.5 sqkm, statistics on Gibraltar's housing market are sparse.
'There is no institution that monitors price movements because Gibraltar is too small and monitoring is too expensive for them, so agents must feel their way through the market,' he said.
'In consultation with other agents, bank valuers and from our own sales, I would say price levels are now comparable to early 2007.' 
The market for good quality homes, valued at 400,000 Gibraltar pounds (HK$5.08 million) or more, was firmer than for lower-priced properties, he said, because of strong demand from incoming business executives working in Gibraltar's expanding services industries. Most buyers bring in cash or have a small mortgage.
Estate agents said the market for homes in that price bracket, or more, was also helped by steady demand from wealthy individuals moving to Gibraltar to take advantage of low personal taxes.
Gibraltar runs a scheme called Category Two, whereby wealthy overseas individuals have taxes on their worldwide income capped at 22,000 Gibraltar pounds each year if they take up residency in the territory.
According to Beauchamp Estates, Gibraltar has 330 high-net-worth foreign residents taking advantage of its Category Two scheme, and receives 40 applications each year from others wanting residency.
Overall housing demand is underpinned by Gibraltar's rapid gross domestic product growth since the 1990s. 
It grew at 8 per cent last year and is forecast to expand by 5 per cent this year. The territory's job market has grown 45 per cent over the past 10 years, according to government figures. 
The government has encouraged economic diversification since the mid-1990s to ease its reliance on providing port facilities for the Royal Navy. It is developing itself into a shopping centre for the western Mediterranean.
And, because it is a tax haven, Gibraltar has created new jobs in financial and legal services, retail and, most recently, internet gaming.
About 50 per cent of Gibraltar's GDP now comes from shipping, a long-term mainstay of the economy and tourism. 
Mr Boyd said that demand for offices and housing in Gibraltar had been given another boost by the government's decision to set corporate tax at a standard rate of 10 per cent for all companies, from July next year, because it was attracting more overseas businesses to the territory. Existing corporate tax rates range from zero to 27 per cent.
'We heard at the end of March that [British gaming company] William Hill is relocating 40 executives to Gibraltar because of the corporation tax cuts,' Mr Boyd said. 'Insurance companies are relocating to Gibraltar - they are now building their offices - and their staff will follow later.'
Chesterton Gibraltar said demand for rental properties had started to rise because the strengthening euro had helped make Spanish rents 30 per cent more expensive than early last year  for those earning in pounds.
Expatriates working on the Rock traditionally prefer to rent a house with a garden in Spain because these properties are rarely available in high-rise Gibraltar.
But, Mr Boyd said, times were changing. 'This quarter, we are seeing that executives are thinking whether Spain offers value for money because the euro has risen against the pound, so some of these guys are moving back to Gibraltar,' he said.
The quality of housing in Gibraltar was improving with new developments being built, he said.
These include several schemes at Ocean Marina Village. Prices at the village's 16-storey Imperial Ocean Plaza range from 160,000 Gibraltar pounds for studios to 580,000 pounds for three-bedroom apartments.
Fairhomes is building 32 detached villas at prices ranging from 895,000 to 4 million Gibraltar pounds next door.
Studios in the secondary market are on offer for 80,000 Gibraltar pounds through surveyor Brian Francis & Associates.
Business friendly 
The standard rate of corporate tax (in per cent) from July next year: 10



Life on the Rock looks attractive to buyers