MOVES by major developers to cut pre-sale prices for new flats have generated strong buyer interest in Hong Kong's lethargic residential market. And higher activity in the sales market for new flats could signal an end to the slump in the second-hand market. The developers' cuts are believed to have prompted price reductions in the secondary market, triggering a rise in sales activity in the sector. A number of property agents have reported an increase in second-hand flat sales. But Brooke Hillier Parker residential manager Mark Noton warned the statistics could be misleading. 'The underlying number of transactions has been very low and increases in percentage terms can make a small increase in sales appear much larger,' he said. Buyers behind the new levels of activity in the secondary market are mostly second-time buyers and although the break in the sales drought is welcome, there is still no relief in sight for first-time buyers sidelined by mortgage lending restrictions. In the survey of flat prices carried out last week by Brooke Hillier Parker, average asking prices dropped by 1.6 per cent at luxury Mid-Levels estates. The average price per square foot at Dynasty Court, Estoril Court, Lyttelton Garden and Robinson Place is $9,368 per square foot. Flats on the south side of Hong Kong island, the other luxury pocket, dropped by one per cent in the past month to $8,785 per sq ft. On average, flats at Grand Garden, Parkview, Pacific View and Redhill Peninsula were $583 per sq ft cheaper than Mid-Levels. Asking prices at Ap Lei Chau's South Horizons remained unchanged at $5,622 per sq ft.