Luxury home sales set to lead market

MORE luxury homes were sold last month and prices rose because of pent-up demand and tight supply, says Mr Mike Koo, sales director of Midland Property Consultants.

He said prices for luxury homes and garden houses were likely to rise if uncertainties about Governor Chris Patten's political reforms were resolved.

The luxury residential market was expected to outperform the mass home sector during the next six months.

He said the investment value of upmarket homes would be higher than that of standard housing, although sharp increases in prices were not expected.

Meanwhile, the initial response from buyers to the sale of 100 garden houses in Sun Hung Kai Properties' Palm Springs in Yuen Long was said to be ''fair''.

The developer started registering potential buyers yesterday, and analysts said the response seemed ''satisfactory'' although the number of people registered was not available. Registration continues until tomorrow.

Mr Chan Man-wai, assistant manager of Centaline Agencies' branch office in Fairview Park, expected the sale of the houses to be well received.

He said the selling price of about $2,100 to $2,200 a square foot was below market rates for similar houses in the area.

''Only 100 houses are being offered, and they could easily be absorbed by the market,'' Mr Chan said.

The offer of 90 per cent mortgage financing could further attract buyers who could not afford the 30 per cent down-payment required under the banks' 70 per cent mortgage limit, he said.