Hong Kong’s biggest developer Sun Hung Kai Properties Ltd saw its profit rise 0.5 percent as the Hong Kong Special Administrative Region’s real estate market showed signs of bottoming out.

Underlying earnings, which exclude property revaluations, increased to HK$21.9 billion ($2.8 billion) in the year ended June 30, Sun Hung Kai said in a filing on Thursday. The profit gain is the first after three years of declines. The figure compares with an average estimate of HK$22.4 billion from 10 analysts surveyed by Bloomberg.

“Hong Kong’s residential market showed further signs of stabilization on the back of relaxed mortgage restrictions and lower local mortgage rates,” as the influx of talents and students as well as rising rents helped the market, said the company in the statement. Profit generated from property sales grew 5.6 percent.

ALSO READ: Top Hong Kong builder sees weekend sales frenzy 

Sun Hung Kai is set to benefit from the improving property market. Hong Kong home prices could rebound by a total of 8 percent in the second half of the year and 2026, thanks to cheaper mortgage rates and a stock-market recovery, according to Bloomberg Intelligence. Home prices have been rising since April, data from the HKSAR government show.

Still, the weakness in the commercial property sector weighs on the developer. The group has seen rental income drop by 2 percent in the period.