“The location is also convenient with good transport networks,” the buyer, who asked not to be named, said. “I believe the property market has its ups and downs. Compared with properties on the private market, this flat still has a discounted price.

“I would agree that it is a great deal if the property market recovers later.”

The development has 125 one-bedroom, 108 two-bedroom, and 27 three-bedroom flats with floor areas from 303 to 600 sq ft.

The flats were put up for sale at 22 per cent off last September’s market prices, going for between HK$4.08 million (US$521,767) and HK$9.64 million.

But URA managing director Wai Chi-shing said the discounted price was adjusted by about 13 per cent earlier this month because of a downward trend in the market.

Owners cannot sell or let the properties within five years from the date of the first assignment. The owners also have to pay a land premium to the URA after five years.

As it happened: Hong Kong budget – all property curbs scrapped to boost market

Buggle Lau Ka-fai, the chief strategist at estate agency giant Midland Realty, said the rules undermined flexibility for owners in handling their properties, although the discount offered was still an incentive for prospective buyers.

“Compared with private residential developments, these units are slightly cheaper and of decent quality, which will make them attractive and generate interest from the public,” Lau added.

“But the fact that they cannot be resold or rented out for five years and the URA will not repurchase the flats limits the financial flexibility of homeowners compared with the private market, especially considering that the government has recently revoked the property market cooling measures.

“The private market now offers a wide range of options, including second-hand and unsold homes. If some owners plan to move to other countries, they will now have more flexibility to sell or rent out their property, providing a larger scope for their initial investment.”

Financial Secretary Paul Chan Mo-po decided to scrap the decade-old property curbs as part of his budget. The move marked the end of three types of stamp duty – one levied on buyers and designed to target non-permanent residents, one paid by second-time purchasers and a special tax aimed at homeowners who resold their property within two years.

Midland this month said the number of transactions at the 35 largest housing estates in the city had reached a two-year high, with three consecutive weeks of triple-digit figures, after the duty payments were scrapped.

It also logged more than 1,660 first-hand transactions in the first 10 days of March, a 25-fold increase on the 64 deals recorded over the same period last month.

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Gary Ng Cheuk-yan, a senior economist with corporate and investment bank Natixis, said buyers could opt for similar flats in the same neighbourhood given the narrowed discount and restrictions.

“Buying a home is a big decision for most residents – the 13 per cent discount is not big enough to offset the risks at the current juncture,” he said.

Applications for the eResidence Tower 3 flats were only 14 times the number of homes available. The figure was significantly less than the 20,000 applications made for the first two eResidence Towers in 2019, which were 45 times the quota.

Starter homes were introduced in 2018 as a new kind of flat for the middle class, who might not be able to afford a home in the world’s most expensive residential property market but were too well-off to qualify for a public rental unit.

Single people who apply for a one-person flat should have an income of between HK$31,001 and HK$40,300 a month and their net wealth should not exceed HK$956,000.

Family applicants must have a combined income of at least HK$62,001 but not more than HK$80,600, and their total net wealth should not be more than HK$1.91 million.