The mainland's property sector is regaining its strength, with prices and transaction volumes steadily improving, but risks for Hong Kong developers are rising, Standard & Poor's Ratings Services said in a report on Friday.

"Hong Kong developers could have a challenging year ahead in view of frequent and repeated government intervention in the property market. Residential developers face heightened policy risks and likely weaker property sales," said Standard & Poor's credit analyst Christopher Lee.

Mainland developers, on the other hand, are likely to have a reasonably good year. The residential property market has stabilized, with prices and transaction volumes steadily improving.

"Residential developers in China are starting to rebuild their strength. Financing conditions and liquidity have improved while refinancing risks have moderated. That's why we recently revised our outlook for the Chinese market to stable from negative," said Standard & Poor's credit analyst Bei Fu.

The report notes that smaller Chinese developers could still struggle to raise funds or overcome stiff competition.

"Our only positive outlook is on the Indonesian property sector, which we believe is likely to benefit from continuing economic growth and low mortgage rates in 2013," said Fu.