LUXURY home prices soared upward a further 23.6 per cent in the last quarter, taking the rise for 1993 to a staggering 63 per cent, according to Jones Lang Wootton's residential capital index. Spurring a resurgence of speculative and mainland buying, the recent surge was significantly ahead of market expectations and is likely to refuel speculation that Hong Kong's big banks will tighten the screw on mortgage lending for the top end of the market one notch further. On Hong Kong Island, average prices in the luxury residential areas of Mid-Levels, The Peak and Island South are currently around $7,500 to $8,200 per square foot gross for apartments versus achieved prices of $4,500 to $5,400 per sq ft a year ago. Mass market prices, not monitored by the JLW Index, are said to have enjoyed only moderate growth in 1993 due to the banks existing tight mortgage lending restrictions. The charge in capital values has been fuelled largely by strong rental growth, especially over the second half. ''Rents are going up so much investors know they can cover their mortgage repayments quite easily,'' said property analyst Michael Green, a director of S.G. Warburg Securities (Far East). JLW's January 1994 property index, this week celebrating its 10th anniversary, shows luxury rentals rose a further 8.2 per cent over the last quarter bringing the year-end rise up to a hefty 33.2 per cent. Rentals now average $34 per sq ft on Hong Kong Island and $23 per sq ft in Kowloon and the New Territories. Tony Darwell, JLW research director, expected luxury residential rentals to continue their onward march in 1994, rising perhaps another 20 to 30 per cent over the year. However, he was not brave enough to make any year-ahead predictions on the capital values side given their extraordinary 1993 bull run. Demand for luxury rented apartments is expected to become even more intense over the coming year, given Hong Kong's booming economy, expanding companies, influx of new businesses to the territory and the expected handing out of the very labour-intensive second tranch of contracts on Hong Kong's core airport infrastructure programme. Growth in office rentals has also been exceptional, with strong demand for quality Grade A space fuelled by the rapid expansion of the territory's financial services sector. Average prime office rentals in Central today are now in the vicinity of $61 per sq ft net, with one-off deals of up to $87 per sq ft recently recorded. The JLW index showed over the last quarter average Grade A office rentals in Hong Kong's core business district rose 12.2 per cent and 56.1 per cent for the year. As demand overtakes supply, landlords are slashing their introductory rent-free periods to less than two months, approximately half that offered in January 1993. The vacancy rate is now 3.5 per cent in Central compared to 5.7 per cent a year ago, in Wan Chai/Causeway Bay 3.5 per cent, compared to 9.9 per cent at the end of 1992, and in Tsim Sha Tsui 5.3 per cent, compared to 4.5 per cent at the end of the previous year. Mr Darwell said: ''With little or no Grade A supply scheduled for completion over the next 24 months, landlords are in a position to be very aggressive with asking rentals in Hong Kong's leading buildings in excess of $70 per sq ft net.'' The JLW Index recorded an increase in rentals in Wan Chai/Causeway Bay of 10.3 per cent over the last quarter and 53.7 per cent for the year. While rentals in Tsim Sha Tsui rose more modestly, by 4.8 per cent over the final quarter and 15.3 per cent for the year. Far more robust rental growth has been forecast for Tsim Sha Tsui in 1994, despite an overdose of new space. The Gateway, 100 Canton Road, Park Lane Centre and Peninsula Office Tower will be hitting the market with a huge amount of new space at the same time.