55 luxury units above $50 million sold in 2Q14, up 5.8% y-o-y

Demand is still considered soft, however.

Demand for luxury units remained soft in 2Q14, because although 55 properties priced above HKD 50 million were transacted, up 3.8% q-o-q and 5.8% y-o-y, the figure was still below the ten-year (2004–2013) quarterly average of 73 transactions.

According to a research report from JLL, meanwhile, market activity in the overall market picked-up noticeably, albeit off a lower base of comparison, rising by 48.4% q-o-q and 39.9% y-o-y to 16,011 transactions.

The luxury sales market was highlighted by the launch of Grand Austin in West Kowloon and Mayfair By The Sea I and II in Tai Po, which were put up for sale towards the end of 2Q14.

Response to these launches was positive. Over 60% of the 691 units at Grand Austin and over 40% of the combined 1,091 units at Mayfair By The Sea I and II were sold.

Here's more from JLL:

Looking ahead, more new residential schemes are set to be launched for the sales market, keeping the primary sales market as the main focus of buying activity.

In view of increased competition, developers are likely to need to continue to set prices at competitive levels and offer discounts to drive sales volumes.

Price discounting in the primary sales market along with interest rate uncertainty should continue to weigh on capital values.

However, the decline in home prices forecasted for 2014 is now likely to be less severe than our earlier forecasts.

As such, we have revised our forecast for luxury home prices to drop by 5–10% in 2014 instead of the previous 10–15%.

Leasing activity is expected to remain quiet on the back of lacklustre expatriate hiring.

Coupled with an increase in leasing stock amid a slow sales market, luxury rents are expected to fall further.