RESIDENTIAL mortgage lending rebounded 34.7 per cent in March from a two-year low, as the home sales market came back to life after the Lunar New Year. The gross volume of loans made by the territory's 33 largest mortgage lenders came to $5.17 billion, up from $3.84 billion in February, with banks showing more flexibility with their terms for residential lending. The Hong Kong Monetary Authority's monthly lending total was still 46 per cent down on March last year, when the housing market was at its peak ahead of its clampdown on speculation. The number of mortgages granted jumped 58.7 per cent in March and 43.9 per cent year-on-year to 3,893 loans. March got off to a flying start with huge buyer response seen at Sun Hung Kai Properties' cut price sale of about 1,000 pre-sale flats at its new Royal Ascot development at Sha Tin. A similarly strong response was seen for the Land Development Corporation's launch of pre-sales for its Ko Nga Court housing development in Mid-Levels. Both sales provided a long-awaited boost for the primary and secondary residential sales markets. With buyer confidence renewed, other developers, such as Sino Land and New World Development, jumped on the pre-sale bandwagon, anxious to dispose of stockpiled property. Providing a further sign of increased mortgage lending business for banks, the Monetary Authority yesterday reported the volume of new home loans approved in March but not yet drawn upon by borrowers leapt 260.4 per cent month-on-month to $9.225 billion. This shows a huge amount of borrowed money that could be released on to the sales market this month if the banks' customers pursue purchases. Warning of a likely upsurge in mortgage lending activity in March, Monetary Authority acting deputy chief executive Peter Pang said: 'These figures reflect the resurgence of activity in the property market and suggest that the growth rate of outstanding loans will be much higher in April.' Property analysts, estate agents and investors alike have been growing increasingly confident that the recovery in the residential property market could finally be underway, though some fear that another round of interest rises could temporarily spoil the party. The recovery is being seen as fragile, with people appearing to be interested in buying only if the price is right. Consequently, some developers have recently adopted a very aggressive pricing strategy, keen to offload their inventories. Sino Land, for instance, this week announced it would reduce the price for the release of the latest batch of flats in its low-rise Classical Gardens project in Tai Po by more than 10 per cent. Cheung Kong (Holdings) is expected to start marketing its Kingswood Villas development in Yuen Long soon at just over $2,200 per square foot. That would represent a cut of 11 per cent on recent transaction prices on existing apartments in the development in the secondary market. Lending for purchase of properties in China increased 2.3 per cent last month to $4.7 billion.