But Midland Realty (Holdings) executive director Victor Cheung Kam-shing said the sales were only moderate because developers were being cautious to avoid oversupply. He believed the real estate revival would rely heavily on the recovery of the stock market.

Last Tuesday, Director of Lands Robert Pope said property prices had shown signs of bottoming out despite uncertain external economic factors and were likely to pick up in line with inflation in the long run.

Five-hundred flats at Ocean Shores - a joint development by Swire Properties and Sun Hung Kai Properties that accounts for a third of the project - were on sale at an average price of $3,122 per square feet. Apartments vary from about 600 to 900 sq feet and are being sold at between $1.9 million and $3 million.

Of the 500, 270 were sold in an earlier private sale. A total of 1,100 home-buyers were registered to buy the 192 flats in a public sale yesterday. The remaining 38 are on hold to avoid oversupply.

Home-buyers Mr Li and his wife arrived at the sales office an hour before it opened at 2.30pm. They selected an 800 sq-foot flat for $2.5 million. The couple, who live in a Home Ownership Scheme flat, felt prices had fallen low enough.

'We waited to see for some time before making up our mind to buy the flat,' said Mrs Li. 'The price is so low there is not much space for a further drop. The interest cut has definitely speeded up our decision because we will end up paying less mortgage.'

Swire Properties senior development manager Peter Kok Kai-lam said: 'The market response is quite all right despite the fluctuation in the stock market in the US. It shows home-buyers believe it is time to buy flats for self-use,' he said. 'I have not seen any trace of speculation.'