This broke the previous high of HK$294,900 a square metre set in 1997, right before the Asian financial crisis.

The highest-ever selling price for a home in Hong Kong was set earlier this month when one house in the high-end Peak district fetched HK$414,260 a square metre.

Last year another house on the Peak sold at over HK$376,600 a square metre.

Analysts say rich mainlanders as well as people who have made huge profits in the financial markets are fuelling the demand for a limited supply of top-end luxury homes here.

"Penthouses in Hong Kong can cost a premium of as high as 40 per cent to 50 per cent, because there are fewer of them," CB Richard Ellis research director Simon Wong said.

"In recent years homes with full views of Victoria Harbour and with posh clubhouses have also commanded above-average prices."

More records look set to be broken with one of Hong Kong's leading developers, Sun Hung Kai Properties, forking out HK$1.8 billion - a record HK$454,000 a square metre - for a plot of Peak land last December.

This means prices of new homes there will have to be set above this mark, possibly as high as HK$645,600 a square metre, analysts say.

Sun Hung Kai is also co-developer of the luxury Orchard Turn condominium in Singapore, which this week set the city-state's record home price of S$43,000 (Bt1.5 million) a square metre.

But analysts have noted that such extreme prices extend only to a limited supply of homes that are located in exclusive locations and that come complete with luxurious frills.

For Hong Kong this translates into an address on the Peak, country-club-like facilities and top-end designer furnishings.

The latest record price of HK$344,320 a square metre was set by an apartment at The Legend at Jardine's Lookout, which was first released in 2005.

The 346-square-metre penthouse with a private swimming pool cost a hefty HK$123.2 million. It is part of a 376-unit condominium project located near the shopping district of Causeway Bay.

Incidentally, Causeway Bay also commands retail rents that are among the world's costliest, if not the highest.

Hong Kong's luxury-home sector - units exceeding 100 square metres - are expected to rise by 10 per cent to 15 per cent on average this year.

On the other hand, mass-market apartments are forecast to appreciate more slowly in the single-digit range. Slightly more than half of Hong Kong residents live in private properties.

Vince Chong

 The Straits Times/ANN