Sun Hung Kai Properties (SHKP) looked set for another sell-out at its Novo Land project in Tuen Mun as life returns to Hong Kong’s housing market after almost three years of subdued demand under Covid-19 restrictions.

Nearly 10,000 potential buyers have registered an interest in the 171 flats available in the second batch of Phase 2B of the project in the New Territories, according to SHKP, which means about 58 people are competing for each unit.

As of 9:10pm on Wednesday, some five hours after sales formally opened, 165 units had found buyers, according to agents.

During the weekend, Hong Kong’s most valuable developer sold all 352 units on offer at the development.

Hong Kong’s residential property market appears to be on an upswing, with developers such as SHKP and Wheelock Properties achieving strong sales in their respective projects in recent weeks.

The improvement in the property market comes after Hong Kong fully reopened its border with mainland China. The government has also broadened the set of buyers exempted from paying ad valorem stamp duty as it extends tax concessions to buyers of units worth less than HK$10 million.

“Both have helped the property market, but opening the borders is more important as it has a very positive impact on market sentiment and the business environment,” said Buggle Lau Kai-fai, chief analyst at Midland Realty.

With Hong Kong and Beijing abandoning almost all their Covid-19 containment curbs, buyers and investors are motivated to snap up new flats as they anticipate an economic recovery, which in turn is likely to boost demand for homes.

SHKP said its latest batch of one- to three-bedroom flats have sizes ranging from 277 to 678 square feet. They are priced between HK$4.232 million (US$539,000) and HK$9.366 million, or an average of HK$14,098 per square foot.

Cash buyers could be entitled to discounts of as much as 15 per cent as well as a furniture package bonus, according to SHKP.

“As a new home, the prices of the units are relatively cheap. The stamp duty cut is pushing buyers to make decisions fast,” said Sammy Po Siu-ming, CEO of Midland Realty’s residential division for Hong Kong and Macau. “It’s proving to be quite popular among young homebuyers.”

The project’s location – it is part of the Northern Metropolis plan that aims to create new towns close to the border with mainland China – also adds value to the flats, said Po.

Not all analysts are convinced the property market is on a path to recovery.

Although home prices have risen – JLL’s mass residential capital value index gained 2.6 per cent in the last two months – the number of transactions has remained low since January, according to Nelson Wong, executive director of research at JLL in Hong Kong.

“The reopening of the economy at the turn of the year was a timely event to help release pent-up demand to the market. However, once the demand is digested, turnover will likely return to a low level,” Wong said.

In January, 3,051 residential transactions were recorded, 18.7 per cent lower than the monthly average of 3,755 in 2022. Demand from non-local buyers was also low, accounting for only 34 transactions, far lower than the monthly average of 53 last year, JLL said.

“The rising home prices since entering 2023 may not last,” Wong said.