Prices of luxury residences are expected to rise 10 per cent in the second half of this year, according to a DTZ Debenham Tie Leung research report. The property consultant said prices in the luxury residential market rose 5 per cent in the first quarter and 3 per cent in the second on strong take-up and increased activity. Residential department director Karim Azar said demand for properties in prime locations continued to be strong. Some new developments such as The Colonnade in Tai Hang Road had also had good responses. 'I think in the next half year a 10 per cent rise in the sales prices in the luxury market can definitely be achieved,' said Mr Azar. The leasing market of the luxury sector was also active, with rental values up 15 per cent in the first half of the year, DTZ said. Mr Azar said prospects for the luxury residential market were good due to limited supply and growing demand. The mass residential sector was slow. Research director Alva To Yu-hung said the transaction volume decreased 20 per cent last month compared with May. But he said market sentiment improved as new developments received good response. A 5 per cent to 10 per cent rise of sales prices in the mass residential market was expected, he said.