Hong Kongs property sector is set to continue growing as we move in to 2005 given the citys economic recovery after years of deflation and slumping sales.

U.S.-based Prudential Real Estate Investors believes that Hong Kongs office rental levels, up 20% in the past year, are set to continue rising in the foreseeable future, while the citys luxury residential market has achieved on-year capital gains in the region of 45%.

In a recent sector report, Prudential said that "residential and retail markets will continue to benefit from improving employment prospects, stable and rising asset markets and a rebound in domestic demand."