New home deals reached an 11-year high last month, indicating a potential revival for the property market following the removal of government cooling measures.

During March, 4,170 sales were recorded in Hong Kong, over 14 times the number from February, as per a report from the Hong Kong Economic Journal. 

Following Hong Kong authorities' decision to eliminate property restrictions in late February to boost the sector, there has been a surge in sales activity. Developers are banking on this increased demand to alleviate excess inventories, which have been suppressing prices, Bloomberg reports.

"We think that the strong sentiment for firsthand transactions should extend into April. Even if non-Hong Kong buyers are asking for lower prices, they are showing a much higher level of interest to purchase a property," said the chief executive of Midland Realty's residential division for Hong Kong, Sammy Po.

One contributing factor to this increase may be the introduction of various new projects, such as Wheelock Properties Ltd.'s Seasons Place and Henderson Land Development Co.'s Belgravia Place. Both developments have reported robust performance, potentially fuelling the overall increase in home transactions.

Furthermore, over the weekend, CK Asset Holdings Ltd. unveiled additional units of its Blue Coast development located on the southern side of Hong Kong Island. The demand was exceptionally high, with 50 times more bidders than available units, drawn by the development's competitive pricing, discounts, and its close proximity to international schools.

However, despite these positive developments, forecasts suggest that Hong Kong's residential market could face further weakening in 2024. UBS Group AG anticipates a 5% decline in property values. Additionally, the heightened interest from buyers in new homes is likely to exacerbate pressure on prices in the secondary market.