'Our results indicate that hedge funds are more inclined to want a volatile market,' said the deputy chairman of Midland Holdings, Albert Wong Kam-hong, who cited the period from 1996 to 2003, when home prices peaked in 1997 then plunged nearly 70 per cent.

A little under half of the 18 per cent who hope for a volatile market believe more than 20,000 new homes should be available each year.

Wong said the results suggested the government's annual target of 30,000 to 40,000 new homes a year might be worth re-examining.

In February, Financial Secretary John Tsang Chun-wah announced a series of measures in his budget speech that he said were aimed at raising the annual supply to as many as 40,000.

Asked why Hong Kong home prices had not dropped in response to this proposal, Wong said the market usually lagged behind such announcements.

'We saw in 1997 that home prices started to fall several months after the government announced an annual housing target of 85,000,' he said.

Home prices jumped 9 per cent in the first quarter of this year.

Buggle Lau Ka-fai, chief analyst at Midland Realty, said the average take-up rate of new homes for the past 20 years has been 20,000.

'This raises the question whether 20,000 units are sufficient to meet our demand. Our survey indicated 65 per cent of the interviewees supported the figure,' Lau said.

Of the managers interviewed, 45 per cent work for long-term funds, 36 per cent for securities houses and 17 per cent for hedge funds.

House calls

The number of new homes per year proposed in the budget: 40,000