Hong Kong property appears once again a sure-fire road to riches. There is a steady flow of upbeat brokerage reports and people are wrestling to get to the front of the queues at the latest hot developments. As banks offer ever smaller deposit rates, there is another incentive to park some money in property. And property bulls add that Hong Kong now looks cheap compared with Sydney or London. In public, Chief Executive Tung Chee-hwa may worry about Hong Kong's high costs, but his government is actively propping up property prices. The recent resumption of land sales through a new application list looks intentionally parsimonious, allowing space for just 7,800 new flats. Few would complain if prices did go up. The government could plug some of its deficit, developers shift a few empty tower blocks, banks rekindle some loan growth and perhaps negative equity might become just a bad memory. However, the return of such a rose-tinted property picture will probably remain wishful thinking. While positive external forces may benefit the luxury end of the market, without a robust recovery in household incomes, the deeper malaise in the mass residential market looks likely to cap price rises. A case made by Colliers Property for the luxury market to see further price gains this year after a 15 per cent rise in the last quarter last year appears plausible. A pick-up in capital-market activity revived expat arrivals as more bankers and professionals were hired. Currency gains also played a part in persuading buyers that there was relative value in the Hong Kong market while new supply remains limited. But painting a similarly positive picture for the mass residential market requires a much bigger leap of faith. Here it is harder to conceive of prices benefiting from international money flows. If anything it is the relative property prices in Yuen Long and Shenzhen, rather than in Mid-Levels and London, that will be totted up in the buyer's mind. Yes, prices have tumbled 60 per cent and, on paper, affordability looks compelling. But growth in household income is the weakest link in the way of any sustainable revival. Take this worrying statistic: almost 25 per cent of Hong Kong households now have a monthly income of less than $8,000, more than double the number in 1997. The gravitational pull this deteriorating income trend exerts on mid- to lower-end property prices will be hard to shake off. It certainly undermines confidence. Optimists also point to a return of inflation. But if price inflation is not accompanied by wage inflation, capped by still high unemployment, household balance sheets will not improve. Supply also plays a crucial role. Developers are adept at drip-feeding property units to create pockets of scarcity - a favourite tactic is to sell a limit of 200 units one weekend and announce prices are going up the next. But with a backlog of unsold flats equivalent to at least a year's supply, according to Colliers, can buyers be sure this trickle of flats will not turn into a torrent on any price rise? Perhaps in Hong Kong more than most markets, buyers need to be particularly careful which queue they line up in. Location, Location, Location is an overused mantra of property agents, but rings loud in Hong Kong. Recreating a luxury pocket like Mid-Levels is difficult. Recreating another sprawling Tsuen Kwan O estate is altogether easier.