With uncertainties in the United States and Europe hanging over financial markets, Vice-Premier Li Keqiang's announcement of policies designed to help Hong Kong's economy provided a timely tonic for the city and its property market. The policies include the launch of an exchange-traded fund mechanism which allows individual mainland investors to invest directly in Hong Kong equities, a 20 billion yuan (HK$24.4 billion) qualified foreign institutional investors quota for Hong Kong companies investing in mainland securities, further expansion of yuan bonds in the city, and other commercial opportunities for people and companies from both sides of the border. 'The vice-premier has made it clear that the central government will support Hong Kong in areas such as finance and people's livelihoods. With the uncertainties over the finance of the US government also dissipating, the mood of the property market is stabilising and improving,' says Andy Ho Pui-ming, a director at Midland Realty. Leading property agencies are showing their confidence in the market by expanding their presence. Midland and its subsidiaries have just opened 33 branches across Hong Kong and the mainland. Centaline Properties plans to open another 10 outlets in the second half of the year, having added 54 branches in the first six months. Cash-rich mainland investors have shown sustained and widespread interest in Hong Kong luxury properties this year. One of the hottest high-end properties at the moment is The Masterpiece, developed by New World Development and the Urban Renewal Authority, and in the heart of Tsim Sha Tsui. The hotel-residential-retail complex in Hanoi Road provides 345 luxury flats on the 27th to 67th floors of the high-rise building. Sales have been positive, with one unit selling for HK$29.57 million or HK$18,615 per square foot. 'Since the relaunch in August, the project has been very well received by local customers and those from the mainland and overseas,' says Melvin Yeo, director of sales and marketing at New World. Another example of strong market support is a HK$1.85 billion deal involving 90 per cent ownership of the Arts Mansion in Mid-Levels. The owners agreed to sell the ageing building in the prime residential district to an active property investment fund. The transaction represents the largest private collection sale in Hong Kong, with some 130 property owners selling the flats collectively. 'Despite fluctuations in the global financial market, investors are confident in the Hong Kong real estate sector,' says Henry Lam, executive director of Knight Frank, which lined up the transaction. According to Centaline Property Agency, about 40 per cent of new luxury homes in Hong Kong were bought by mainlanders in the first six months of this year. Its research shows that only a small fraction of luxury homes traded in the secondary market, representing 3.1 per cent of transactions and 4 per cent of total value, were unloaded by mainland sellers. Wong Leung-sing, associate director of research at Centaline, says he is optimistic that the trend of mainlanders buying Hong Kong luxury homes will continue to gain pace. 'The momentum of mainlanders purchasing luxury properties in Hong Kong is set to grow further. This is especially true with further central government rules restricting mainlanders buying into flats in second-tier mainland cities. This will encourage more capital to look elsewhere for opportunities and Hong Kong luxury homes will continue to be a key focus of interest for mainland investors,' he says. 'Luxury property prices will remain firm and stable given the tight supply and strong demand, although the mass residential market may experience adjustments in the short term. With the prevailing low interest rate environment and increasing inflation pressure, more capital is likely to flow into the property market.' Simon Lo, executive director of research and advisory services at Colliers International Asia, says mainland investors, including some businessmen with cross-border activities, have been actively buying Hong Kong luxury homes in recent years, representing about 40 per cent or more of sales in the luxury sector. But he adds that, with the latest financial market jitters and worries over the global economic recovery, sentiment has softened and property inquiries from mainlanders have fallen. Lo expects to see limited effect from the latest central government measures on the local market, but he believes Hong Kong luxury homes will remain a hot investment for mainland buyers.