The property sector on Wednesday welcomed the government's move to ease mortgage restrictions, saying it will significantly boost the property market and the overall economy.

In his third Policy Address, Chief Executive John Lee announced that the maximum loan-to-value (LTV) ratio for homes will be adjusted to 70 percent regardless of their value, while the maximum debt servicing ratio (DSR) will be raised to 50 percent.

Hannah Jeong, from real estate services firm CBRE, said she thinks the relaxation will boost transaction volumes, especially in the luxury market.

"This will give a better liquidity for the homebuyers, the people who are looking for the upgrading demand, or they want to enter the market [for the] first time given the good discount offering from the developers. And their down payment amount has been reduced by utilising this LTV ratio increase," she said.

"So this improvement will affect, in a possible way, the luxury residential [market] more, because previously it was only 60 percent."

Joseph Tsang, chairman of real estate services company JLL, said the LTV move will boost transaction volumes for new residential projects, but it won't be strong enough to reverse the downward trend in housing prices.

"The future trend of Hong Kong housing prices will largely depend on the effectiveness of economic stimulus measures introduced by the mainland government," he wrote in a statement.

Real estate and construction sector lawmaker Louis Loong also welcomed the changes, adding that he is happy to see the maximum LTV ratio and DSR limit back to pre-2009 levels.

"This sends a very positive message to the entire property market. We have always told the government that a weak property market is not beneficial for Hong Kong's overall economy," he said.

"I believe this will have a very positive effect on Hong Kong's entire property market and even on the economy as a whole."