Due to luxury residences in Hong Kong being Asia’s second most expensive, house prices in Hong Kong rose by +5.5% in the first quarter from the end of 2008, according to a report by Centaline Property Agency.

Lower mortgage rates and an average price decline of -20% from the same period last year may have encouraged buyers back to the market. However, Li Ka-Shing, Hong Kong billionaire, said that Cheung Kong, his property flagship, no longer needed to line up banks to lend as the mortgage market is “much better”. The value of new mortgages in the city, in its first recession since 2003, fell for the seventh month in February.

Of the 10 biggest housing estates tracked by Centaline, prices at Taikoo Shing in the eastern part of Hong Kong island rose the most by 9.9%. Mei Foo, located in Kowloon, ranked number two after posting a +9.6% gain, according to the report.