The Hong Kong residential market has slowed according to the latest ‘ Hong Kong mid-year property review’ by J ones Lang LaSalle.

Over the past 12 months, the government have been imposing austerity measures to better manage overheating risks in the residential sales market and the combined impact from the implementation of a Special Stamp Duty and the higher barriers set for potential buyers through lower loan-to-value ratios, has led to a relative slowdown in sales market momentum in the first half of this year.

Just over 55,000 residential sales were recorded during the period, reflecting a 16% drop from a year earlier. However, an average of 9,200 transactions per month during the past six months is still considered healthy compared with the levels previously achieved in 2005, 2006 and 2008 (8,600, 6,800 and 8,000 transactions per month, respectively).

For properties at HK$20m or above, (£1.5m+ approx.), a total of 1,260 transactions were recorded in the first half of this year, which reflects a fall of 33% compared to 2H 2010.

These transactions added up to a total consideration of HK$59.4bn, down 20% compared to 2H 2010.

However, despite a slowdown in sales volume, capital values of luxury residential properties increased by 16% during 1H 2011.

Joseph Tsang, managing director of Jones Lang LaSalle Hong Kong, said: “There is a low chance of seeing future supply rebounding before 2015/2016 and this will provide strong support to capital values in the foreseeable future.”