HONG KONG - In a shopping mall in one of Hong Kong's prime retail districts, more than 100 people wait patiently to take a lift to the sales floors - not to buy luxury bags or clothes, but high-end apartments with price tags of up to US$4.4 million (S$5.4 million).
Foster Lee, a 30-year-old banker, was among the lucky ones who won the chance to buy a unit after a ballot in which more than 1,600 people signed up for just 80 luxury units on offer.
"I was expecting home prices to fall four years ago and they keep increasing. It really hurts," said Lee, who plans to buy one of the flats offered by New World Development and Wheelock & Company Ltd. in a prime location near Kowloon West for his family.
Signs on the ground point to a clear pick-up in demand from local and Chinese buyers, thanks in part to steep discounts offered by developers to offset higher stamp duties imposed a year ago to cool prices that have jumped 120 per cent since 2008.
The boom was fueled in large measure by the Federal Reserve's dollar printing campaign, or quantitative easing, to drag the US economy out of the global financial crisis.
It became easy to borrow cheaply, and with Hong Kong's currency pegged to the US dollar the effects of the policy were easily transmitted to the property market.
But now some analysts expect property prices to fall as the Fed is expected to start withdrawing its monetary stimulus some time during coming months.
Regardless, many home buyers, like Lee, have shrugged off recent forecasts of a drop of up to 50 per cent in prices over the next 12 months and decided to take a chance.
"You see that people who earn less than you have caught up with you because they bought then. It's like a girl you liked got married," Lee said.
Last weekend, long queues at one project prompted developer Hang Lung Properties to postpone pre-sales and change the first-come, first-serve rule to a ballot system, in which more than 400 buyers competed for just 80 units priced from HK$8 million to HK$15 million (S$3 million).
Industry watchers said up to 30 per cent of buyers at recent popular projects were mainland Chinese, whose presence in the new luxury home market had fallen to less than 12 per cent from 43 per cent after cooling steps in October last year.