Buying activity surged in the mass-housing sector after Friday's 50-basis-point cut in interest rates - the second reduction in a month. Transaction volume at the weekend nearly doubled the number of deals of the previous week, agents said. But they pointed out that the large increase in activity was due mainly to the residential market being very quiet over the Lunar New Year. An aggressive rate-cut strategy in the United States had prompted some owners of properties in good locations to increase asking prices by up to 5 per cent, agents said. They indicated the weekend transactions were dominated by smaller units with price tags below HK$2 million, saying the luxury-home sector remained quiet. Property analysts and agents expected an overall improvement as more rate cuts come through. From Monday, leading banks lowered the best lending rates by 50 basis points to 8.5 per cent. With banks offering new-home loans at 2.25 per cent below prime, the standard mortgage rate is 6.25 - the lowest in 13 years. Centaline Property Agency and Ricacorp Properties, two of Hong Kong's largest estate agents, reported significantly more transactions. They said weekend business doubled levels before the Lunar New Year. Centaline managing director Shih Wing-ching said the company's daily commission revenue at the weekend was HK$2.5 million, against HK$1.3 million previously. The rate cuts, to some extent, had accelerated plans by potential homebuyers to commit to a property, particularly in the mass-home sector, he said. Sales of smaller units in Tuen Mun and Tsuen Wan were appreciably more active than in other districts, he said. Despite increasing buying interest, the transaction volume remained low as buyer confidence in the market had not yet fully recovered, he said. Mr Shih said rising sales were not sufficient to push up prices in the short term. That would take monthly transactions to rebound at a stronger pace and reach a level of 10,000 sales from the existing 6,000 to 7,000. Ricacorp Properties managing director Barry Law Lam-wai said interest-rate cuts could boost buying interest as they reduced the monthly instalment requirements for buyers. He said some owners in large housing estates, such as Taikoo Shing and Kornhill, had raised their asking prices 3 per cent to 5 per cent after the positive news on rates. Some sellers were no longer willing to offer steep price discounts, he said.