HONG KONG: Prices of luxury homes here, already the highest in the world, may rise further due to a lack of supply as an economic recovery spurs demand, property adviser and consultant Savills plc said.

“There is no bubble, and in the extreme cases, you may find it hard to accept, but we think the market is still on the upside, given that the Hong Kong economy has rebounded,” Peter Yuen, Savills’ senior director in Hong Kong, told reporters at a briefing on Oct 20.

Henderson Land Development Co, controlled by Hong Kong billionaire Lee Shau-kee, said last week it sold a duplex apartment for HK$88,000 ($38,228) per sq ft excluding parts of the building shared by all residents, a global record on that basis, according to the company.

Given that each residential project usually consists of one to three special units such as duplexes and penthouses, buyers, especially those from outside Hong Kong, prefer such homes to standard apartments, Yuen said.

Hong Kong’s jobless rate unexpectedly fell from a four-year high last month as employers resumed hiring in an economy recovering from a yearlong recession. The seasonally adjusted rate for the three months ended Sept 30 dropped to 5.3%, the government said on Oct 19.

An improving economic outlook in China will also help boost home prices in Hong Kong, Yuen said.

China’s economic growth accelerated in the third quarter from the previous three months, central bank deputy governor Ma Delun said on Oct 20, citing a preliminary forecast. The government will report third-quarter gross domestic product on Oct 22.

Buying by mainland Chinese has bolstered Hong Kong property prices, analysts including Buggle Lau from Midland Holdings Ltd said.

Chinese customers make up about 15% of buyers of the city’s residential property and 75% of total foreign purchasers, Frances Chow, Savills’ director of Kowloon and New Territories residential sales, said on Oct 20. – Bloomberg LP