April 24 (Bloomberg) -- Sun Hung Kai Properties Ltd., the world’s biggest developer, said the worst is over for China’s property market and the company is upbeat on the outlook after a strong response to its Lake Dragon villa project in Guangzhou.

“Guangzhou’s market was the first to fall, and it’s the first to bounce back,” Alfred So, executive director of Sun Hung Kai Real Estate Agency, said yesterday in the southern city. “We’ve seen that in trading volume of the first-hand property market in the fourth quarter last year, and now property prices have pressure to rise because units were sold so quickly.”

Sun Hung Kai’s 60 percent-owned Lake Dragon project in Guangzhou has drawn more than 100 registered buyers, each paying 300,000 yuan ($44,000) deposits to be in line to buy 85 units offered in the first-phase sale, said Echo Huang, general manager for south China at the developer. The project may go on sale May 1, So said, declining to give the average price per square meter.     A collapse in exports dragged China’s economic growth to its slowest in almost 10 years, leading home values to drop by a record in March. Residential values in Guangzhou fell 4.5 percent last month from a year earlier, with new homes decreasing 8.9 percent, China’s National Bureau of Statistics said this month.

Guangzhou home prices have bottomed out and risen as much as 20 percent after the government encouraged banks to increase lending and allowed foreigners to buy property, according to Eric Lam, Colliers International’s general manager in the city.

“Guangzhou is among the top three cities in China where residential prices have dropped the most, together with Shenzhen and Dongguan,” Lam said yesterday by phone. “High-rise condominium prices have dropped as much as 50 percent from the peak in 2007. For villas, prices dropped less than 10 percent from the peak because it’s an extremely scarce resource,” since the central government stopped allocating land for such homes.

Sun Hung Kai shares have gained 26 percent in Hong Kong this year, compared with the 6 percent advance in the benchmark Hang Seng Index. The stock rose 0.8 percent to HK$81.55 at 10:54 a.m. local time.

To contact the reporters on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net; Sophie Leung in Hong Kong at

Last Updated: April 23, 2009 23:00 EDT