The freeze on government land sales will stimulate transactions in the private sector, especially for sites in urban areas, surveyors say.
Private land prices are unlikely to rise, however, because there is no sign that the credit squeeze will ease soon.
Francis Lau & Co (Surveyors) managing director Serena Lau Sze-wan said the company had handled about 10 land transactions in the past six months. The market had almost come to a standstill.
The suspension of land sales was a positive move for the private sector, because in today's depressed market developers had little choice, she said. Developers would look to the private sector for development opportunities, particularly in urban areas.
However, the Government's measures would not push up land values because the market still faced economic uncertainty and tight credit.
Ms Lau said investment in urban areas was less risky than in rural areas. Prices for urban sites with an area of 3,500 square feet had not dropped significantly.
With prices at attractive levels, developers might re-enter the market.