By Clare Jim

HONG KONG Hong Kong's move to raise the maximum mortgages available to some homebuyers, its first relaxation in curbs on home purchases adopted in 2009, boosted shopping interest over the weekend but did little for transaction volumes, property agents said.

One of the world's most expensive property markets, the Asian financial hub raised its cap on the loan-to-value (LTV) ratio on Friday to 60% to 70% from 50%, for properties worth up to HK$30 million ($3.8 million).

Aimed at helping those looking to buy or upgrade homes for their own use, the step drove up visitors to new home launches and existing homes by 20% to 30% during the past weekend compared to the previous week, said Louis Chan, Asia Pacific vice chairman of Centaline Property Agency.

"However the buyers would not react so quickly, because the economy is still not good," Chan added, citing uncertainty over the prospect of interest rate hikes.

Chan said 75% of existing transactions are worth HK$10 million or less, featuring small-sized apartments, so the new measure would help only about a fifth of the transactions.

After home prices dropped 15% last year, market participants urged the government to relax property curbs with measures such as scrapping extra stamp duties for second-time homebuyers and non-citizens.

But the government has no intention to relax more measures after Friday's move, Financial Secretary Paul Chan has reiterated.

With property prices still relatively high amid a housing shortage, it was not an appropriate time for more adjustments, Chan said on Saturday.

Stock market reaction to the easing was muted on Monday, with the majority of property developers rising less than 1%, in line with a gain of 0.6% gain in the benchmark index.

Sun Hung Kai Properties and New World Development, eased 1.6% and 1% respectively, however.

Setting a limit on higher transaction volumes is an existing stress test on the repayment ability of borrowers, which has not been relaxed, said Alvin Cheung, associate director of Prudential Brokerage Ltd.

Property agents in the former British colony say a borrower needs a monthly income in excess of HK$100,000 in order to borrow 60% of a home purchase price of HK$30 million.

"To improve the property market you can't just loosen one measure, you need a basket of relaxations," Cheung said, adding that people were usually reluctant to borrow more at times of rising interest rates.

But many developers welcomed the government move. Henderson Land said it facilitated property trading for homebuyers, while Asia Standard International said it eased some of the burden of down payments.

Phileas Kwan, executive director of Asia Standard, which began selling flats in a new development on Friday, said it had been 9.4 times oversubscribed over the weekend, with buyers including newly-weds and home upgraders.

The company plans to launch more new sales shortly, he added.

(Reporting by Clare Jim; Editing by Clarence Fernandez)