Property developers say the Consumer Council's proposal to increase market competition by selling smaller Crown lots may not work.
The Real Estate Developers Association said it had no objection to the concept in principle, but added public auctions and tenders were not the only source of land for development.
It said redevelopment accounted for two-thirds of Hong Kong's annual residential supply of private sector housing.
Reducing the size of lots would not guarantee sites would only go to so-called 'smaller' developers, it added.
The Consumer Council report also showed it was not familiar with the workings of the property market by presuming that developers with land banks would always bid high to deter new entrants and increase asset value, the association said.
Developers with land reserves were generally more cautious and conservative at auctions and tenders, it said.