Policy measures introduced last week to raise the cost of buying homes in Hong Kong's booming luxury market have so far had little impact on buying demand, agents say. 'The new levies on luxury deals are a small amount for investors who can fork out more than HK$20 million to invest in a property,' said Patrick Chow Moon-kit, the head of research at estate agency Ricacorp Properties. 'As a result weekend sales data shows no dramatic change in response.' Victor Chan, the assistant sales director at Centaline Property Agency's Mid-Levels branch, said investors had been taking a longer-term view of the market, instead of trying to 'flip' properties for a short-term profit. 'They are not likely to continue flipping flats in three months like we saw at the market peak in 1997,' he said. Financial Secretary John Tsang Chun-wah announced in his budget speech last Wednesday that stamp duty on properties sold for over HK$20 million would be increased from 3.75 to 4.25 per cent. In addition, buyers would have to pay the levy within two weeks of signing sales agreements, instead of being able to defer the payment for up to a year. The measures will take effect from April 1. They will raise the amount of stamp duty due on a HK$25 million transaction by just HK$125,000, to HK$1.06 million, and agents said so long as investors anticipated further price gains in the market they would not be deterred from buying. Ricacorp's Chow said 10 deals valued at over HK$20 million were done during the week, the same number as the previous week. Buyers would not be bothered by the hike in duty, since the rise in transaction costs could be recovered in the long term from gains in the investment, he said. A Ricacorp survey of 733 properties going back to 2004 showed buyers who had paid more than HK$20 million for their homes pocketed an average of HK$7.56 million in profits when they resold their flats last year. The survey also showed that 84 per cent of the deals yielded owners capital gains of more than 30 per cent in the five years to 2009. Centaline's Chan said buyers continued to take advantage of the low interest rates and strong housing demand, and investing in real estate had become an effective hedge against rising inflation pressure. Flats bought for more than HK$20 million at the Waterfront Kowloon Station in January were valued at HK$10,864 per square foot, Chow said. This was 13.1 per cent up on their values at the beginning of the year. Prices at the Arch rose 10.4 per cent to HK$18,054 per square foot over the same period. However, despite the continued interest from buyers, developers anxious to beat the deadline for payment of the new levy began to accelerate releases of flats priced at more than HK$20 million over the weekend. Hongkong Land Holdings said it had received reservations for 20 flats at its 300-unit Serenade in Tai Hang, where a 2,617 square foot penthouse will be offered for HK$78.51 million. Meridian Hill in Kowloon Tong, owned by an unidentified American fund, has generated reservations for 50 flats, ranging in size from 1,300 to 2,200 sq ft, with target selling prices of HK$20,000 to HK$30,000 per sq ft. Henderson Land Development is to release flats at its 153-unit Hill Paramount in Sha Tin at a minimum price of HK$20 million each shortly, according to property agents. David Ng, head of property research at Royal Bank of Scotland, said transactions for luxury homes worth more than HK$20 million accounted for just 1 or 2 per cent of total property sales, and pointed out that the higher levy on such a small sector would not help stabilise overall property prices. A greater impact, he said, would be created by government plans to sell six sites for luxury residential development through public auction in the next two years. 'This will have a psychological impact on the top end of the market,' said Ng, adding that flats in secondary locations would also feel the competition where developers marketed them as high-end developments. Nonetheless, he predicted luxury home prices would climb a further 5 per cent this year. Eddie Hui Chi-man, a professor in Hong Kong Polytechnic University's department of building and real estate, said buying interest would falter only if prices began to fall.