Wealthy foreign investors, particularly from mainland China, are continuing to invest in Hong Kong’s ultra-luxury housing market as part of a diversified asset-safeguard strategy, despite low rental yields of around just 2%, helping to cement the city’s place as the world’s most expensive housing market.

Centaline, a real estate agent, report that developers in Hong Kong sold a record $17bn (£13bn) of new housing in the first half of the year, with the average new home costing $1.8m (£1.4m).

The jump in property sales comes despite government measures to rein in prices and curb speculation, such as 15% stamp duty for foreign buyers, as well as heightened tensions in Hong Kong’s relationship with Beijing.

“The major sales are middle-to-small apartments below HK$10m [£7.6m] but the average price looks high because of some luxury villas that cost more than HK$100m [76m],” said Wong Leung-shing, an analyst at Centaline.

A separate report from JLL forecast that property prices in Hong Kong will rise by about 5% in the second half of 2017.