Property prices of new apartment projects in Chongqing range between 5,000 yuan and 7,000 yuan per square metre, according to DTZ Debenham Tie Leung.

'The prices of villas have reached more than 10,000 yuan per square metre,' said Ricky Wong, general manager of DTZ's Chongqing and Chengdu office.

Mr Wong said that the average property price in Chongqing increased by 5 per cent last year. The transaction volume and growth in property prices have slowed down since last year as potential buyers are cautious of the property market.

He estimated that residential transaction volumes had decreased to 11 million square metres last year from 12 million square metres in 2005.

He said that Cape Coral developed by Hutchison and Cheung Kong and the residential project developed by Henderson Land had planned to pre-sell the projects this year.

Xavier Wong, the head of research at Knight Frank, said Chongqing remained an attractive destination for foreign developers and investment funds as property prices were only about 30 per cent of those in Shanghai. It indicates Chongqing may have greater room for appreciation in the coming years. The residential market in Chongqing is less speculative than those in coastal cities.

With a population of nearly 30 million, there is strong demand for residential property in Chongqing.

Mr Wong said: 'Chongqing ranked seventh among all major cities in mainland, following the four first-tier cities including Shanghai, Beijing, Guangzhou and Shenzhen as well as coastal cities including Suzhou and Tianjin. But its residential prices still lag far behind the coastal cities.'

He expects more Hong Kong developers will follow in the footsteps of Henderson Land, Wharf and Hutchison and invest in Chongqing's property market.