Last month's budget from Financial Secretary John Tsang Chun-wah raised stamp duty on homes worth more than HK$20 million to 4.25 per cent, up from 3.75 per cent.

Buyers at that range also won't be permitted to defer payment.

That translates to an extra HK$100,000 for a HK$20 million home, where the buyer will now have to pay HK$850,000 to have the transaction recorded with the government.

Stamp duty must be paid in full and in cash, so it's a direct cost. But most market watchers say it's unlikely to make much difference to luxury buyers who are already putting up at least HK$8 million as a down payment.

'The measure might create a short-term consolidation on the number of sales transactions in the targeted market segment,' says Simon Lo Wing-fai, the director of research and advisory services at Colliers International, in his budget breakdown.

'However, the upward price and volume trend will resume when the market eventually absorbs the increase of stamp duty, and a large number of genuine buyers [will invest] for long-term hold.'

A more significant move occurred in October, when the Hong Kong Monetary Authority cut the maximum amount that a bank could lend on properties worth more than HK$20 million to 60 per cent of the purchase price, down from the 70 per cent that banks are allowed to loan on regular properties.

Still, many top-end buyers don't require financing. 'At the high end we see straight cash, or they're doing 50 per cent financing because interest rates are so cheap,' says Victoria Allan, managing director of brokerage Habitat Property.

It's the lack of supply that will continue to keep driving the top of the market, she adds.

The pool of luxury housing in Hong Kong is remarkably shallow. There are only 23,268 apartments of more than 1,700 sqft in Hong Kong.

Those are the kinds of properties that command prices of about HK$20 million or more, assuming they sell for more than HK$10,000 per square foot. That's a mere 2 per cent of the total residential stock in the city.

It is interest from mainland buyers that has supercharged the luxury property market. Although mainland authorities are also looking to clamp down on 'hot money' and speculation in both the stock and property markets, its efforts aren't likely to change the long-term trend, brokers say.

'The very high end of the market will continue to hold value and do very well, even though I think the mainland money will slow,' Allan says. 'There's a lot of money around. I think it will slow, but I don't think it will stop.' According to a study released by the Hong Kong office of Nomura International, mainland buyers accounted for 20 per cent of all individual buyers in Hong Kong at the end of last year, or one in five, up from 15 per cent in September last year. Including corporate activity and other types of sales, deals from the mainland made up 14 per cent of Hong Kong property sales, again an increase from 11 per cent three months earlier.

Nomura says that Kerry Properties, Sino Land and Sun Hung Kai Properties are the developers most likely to benefit from 'the mainland interest theme'. The estates with the highest interest from mainland buyers are the Arch and the Sorrento in Kowloon, and the Belchers, Residence Bel-Air and the Leighton Hill on Hong Kong Island.

Research analysts Paul Louie, Perveen Wong and Vineet Verma, who produced the report, also note that mainlanders continue to show a preference for new, luxury and urban apartments. The average transaction price was HK$13.8 million, with the strongest interest in Kowloon, particularly Kowloon station, followed by Hong Kong Island.

Separate statistics from Centaline Property Agency reinforce the point that interest from the mainland is both relatively new and picking up.

As recently as 2004, mainland buyers accounted for only 2.5 per cent of all property deals in the secondary market, and only 4.3 per cent of luxury deals.

But the numbers have grown each year since then, to the point where 5.6 per cent of property purchases are now to mainlanders, including the mass market. When you look only at luxury property - Centaline draws the cut-off point at properties worth HK$12 million or more - the trend is even more pronounced, at 18.1 per cent of all sales in the secondary market.

Xavier Wong Kit-hung, head of research at the Hong Kong branch of Knight Frank, worries wealthy mainlanders are used to more space in China, and will put prices for those big units here beyond the reach of local buyers.

'They have driven up the prices in Hong Kong and, eventually, they will squeeze out the middle class of Hong Kong who want to upgrade to bigger units,' Wong says. 'We just don't have enough space, and bigger units for people.'