Luxury residential prices recorded an overall increase of 17 per cent between April and June, averaging about $14,300 per square foot, according to consultants Richard Ellis. It said properties on The Peak saw the largest increase, rising 27 per cent. Prices were twice what they were at the end of June 1996. Soaring prices had squeezed yields to a record low of between 2 and 3.5 per cent at the end of June, it said. The consultancy said it expected to see the luxury sector consolidate in coming months as the market waited for the Government to announce measures aimed at stabilising property prices. It said the suggestion of possible government action had been highly effective in slowing the market. 'As rents are given the chance to catch up with prices, so yields should see improvement,' it said. With little new supply expected in the short term, Richard Ellis said the pressure on rental values was unlikely to ease. It said luxury residential rents rose about 6.4 per cent in the second quarter, representing an accumulated increase of 23.8 per cent for the 12 months to June. Since June, many leading landlords had increased their asking prices by up to 6 per cent. Others would follow, it said. High capital values had encouraged owners to put properties up for sale instead of for rent. Now that the sales market had become uncertain, Richard Ellis expected more owners to return to leasing. In the office sector, rents in prime office districts increased an average of 2.3 per cent in the second quarter, making a 4.6 per cent increase for the first half of the year. Vacancies in peripheral Central were the highest at 9 per cent. Core Central had a vacancy rate of 2.5 per cent and Wan Chai and Causeway Bay scored slightly over 4 per cent, it said. Rents in core Central showed the least growth, improving by less than 1 per cent in the second quarter and 1.6 per cent for the first six months. In Tsim Sha Tsui, vacancies had declined marginally to 8.1 per cent while rents had risen 4.5 per cent, it said. Richard Ellis predicted further rental gains of 6 to 7 per cent in all areas by the end of the year, with vacant premises accounting for 5 per cent of total office stock.