The latest government cooling measures are expected to mainly affect mainland buyers.

Veteran surveyor Tony Chan Dung-ngok, head of Tony TN Chan Surveyors International, fears there will be a knee-jerk reaction following the imposition of the new stamp duty, especially at the high end of the sector in the New Territories.

He says mainlanders make up a significant portion of buyers who favour garden houses and luxury apartments of more than 5,000 sq ft. The stamp duty will seriously harm the top-end market, he warns.

"When luxury property prices soften across the board, wealthy mainland buyers may first look for bargains in traditional prime districts on Hong Kong Island. As a result, [there could be] a price correction in the New Territories' luxury housing market," says Chan, who is also a member of the government's advisory committee on the North East New Territories New Development Areas (NENTNDA).

Another key concern is the possibility of oversupply of land, especially in NENTNDA, which could adversely affect prices.

According to Chan, while the government is attempting to restrict foreign buyers and curb speculation, it is "increasing land supply, especially in the New Territories. I think this sends a clear signal to the market that supply is adequate and there's no need to rush into buying."

The NENTNDA will be one of the biggest future supplies of land for housing. Nevertheless, the plan has drawn controversy, ranging from environmental issues to a more populist concern that the new area will become a mini-city for mainlanders.

The project is intended to provide 53,800 new homes for 152,000 residents as part of the government's efforts to ease housing shortages in urban areas by creating three new towns.

The development areas, comprising 533 hectares, include Kwun Tung North, Fanling North, Ping Che and Ta Kwu Ling.

At the same time, it is also set to become a major land bank for future projects, from public housing to low-density development projects.

While plans are under way to create three new towns, infrastructure projects in the New Territories are also strengthening the property market. The MTR's Sha Tin to Central Link (SCL), which stretches from Tai Wai to Admiralty, will connect several existing rail lines and pass through multiple districts in Hong Kong. The project comprises two parts.

From Tai Wai to Hung Hom, the SCL will extend the existing Ma On Shan Line from Tai Wai to the West Rail Line via East Kowloon to form the East West Corridor.

From Hunghom to Admiralty, it will extend the existing East Rail Line across the harbour to Wan Chai North and Central to form the North South Corridor.

Festival City in Tai Wai, developed by Cheung Kong and MTRC, is set to benefit from the transport project, and recent deals show that prices are strong. A 1,264 sq ft apartment in Festival City in Tai Wai sold for HK$10.6 million, or HK$8,386 per square foot, while a 920 sq ft apartment at Lake Silver in Ma On Shan sold for HK$7.27 million, or HK$7,904 per square foot.

In addition to the railway network, a substantially improved highway system, including Route 3 and Route 9 running through and around the New Territories, has shortened driving times to less than 30 minutes between the New Territories and the central business districts.

It also takes about 15 minutes for residents in Yuen Long and Fanling to cross the border through Huanggang Port via Route 3 and Route 9.

Large property projects in the New Territories next year will include The Reach, developed in Tai Tong Road in Yuen Long by Henderson Land and New World Development; The Beaumount by Cheung Kong in Tseung Kwan O; the Tsuen Wan West station project by Cheung Kong; LOHAS Park (Phase 3) by Cheung Kong in Tseung Kwan O; Century Gateway at Tuen Mun West station by SHKP; The Wings (Phase 2) by SHKP in Tseung Kwan O; and another Yuen Long project by SHKP.

Other developments include a low-density project in Ngau Tam Mei, Yuen Long, by Henderson Land and Kowloon Development; a townhouse project on Tan Kwai Tsuen Road, in Hung Shui Kiu in Yuen Long, by Regal Hotels; Phase 14 project of Discovery Bay by HKR; and a waterfront villa project in Cheung Sha, Lantau, by Swire Properties.

A Kau To Shan site, bought by Sino Land, Kerry Properties and Manhattan Group last year, has been given permission for construction to start this year.

These new projects across the New Territories are expected to be best sellers next year.

The Green in Sheung Shui, Providence Bay in Tai Po, and The Riverpark in Sha Tin should make up three of the top four best-selling projects across Hong Kong in 2013.

Luxury homes in the New Territories have sold particularly well this year. According to Land Registry figures, compiled by Midland Realty, sales of luxury homes valued at HK$10 million or above in the New Territories registered a remarkable 45.1 per cent year-on-year growth in the year to October, outpacing Hong Kong Island and Kowloon over the same period.

Sales of new luxury homes in the New Territories accounted for nearly half of the volume. A 2,233 sq ft apartment at Providence Bay sold for HK$18.33 million, or HK$8,210 per square foot.

A 3,440 sq ft at The Beverly Hills in Tai Po sold for HK$26 million, or HK$7,558 per square foot.

In the secondary market, the New Territories has also witnessed faster growth in the luxury sector. In the first 10 months, sales of secondhand properties of at least HK$10 million increased 7.4 per cent on last year, versus 2.6 per cent and 12.8 per cent decreases posted by Hong Kong Island and Kowloon respectively.

For the long term, Buggle Lau, chief analyst at Midland Realty, expects property prices in the New Territories to gradually catch up with those on Kowloon and even Hong Kong Island in the medium term, as infrastructure and transport links continue to improve citywide and regionally.

"These new homes in the suburbs were marketed at more affordable price tags as opposed to Kowloon and Hong Kong Island," Lau says.

"The price difference is a compelling reason why these new projects sold that well. In Hong Kong and Kowloon, what you can get with HK$10 million is merely a shoebox-sized flat. But in the New Territories, [there are plenty of] bigger homes in excess of 1,000 square feet [to choose from]."

The New Territories is also a magnet for expatriate families.

Sandy Liu, an estate agent with Hong Kong Sotheby's International Realty, says Sai Kung's housing market heated up this year, with many transactions fetching record prices.

"Sai Kung and Clear Water Bay are increasingly popular among expatriate families. "With the opening of two more international schools nearby, I believe that the expatriate population will continue to grow in the short future," she says.

Creative thinking

Development plans in the eastern New Territories are the latest move by the government to create new towns to accommodate the increasing population.

Over the past 30 years, many parts of the New Territories have been turned into modern "satellite cities" as the move to the suburbs took place rapidly. Early new towns were Sha Tin, Tsuen Wan and Tuen Mun, Tai Po, Fanling, Sheung Shui and Yuen Long, and were developed in the late 1970s, followed by Tin Shui Wai and Ma On Shan in the 1980s. Northern Lantau, including Tung Chung and Tseung Kwan O, were developed in the 1990s, and are still expanding to this day. Homes in these new towns are more affordable and often enjoy good community facilities and transport networks, and they have become very popular with young families.