'Most developers are accelerating the pace at which they are building up their land banks on the mainland and seem to be less aggressive about bidding up development sites in Hong Kong,' Mr Yuen said. 'As a result we may see a reduction in sites offered at auction.'

He said developers turned strongly bullish about prospects for the mainland property market about a year ago.

He said the change of focus partly accounted for last week's bidding for a residential site in Wong Tai Sin, which was eventually sold to Kerry Properties for HK$3.98 billion or HK$4,323 per square foot - below a market forecast of an expected sale price ranging between HK$4.1 billion and HK$5 billion.

Sino Land, renowned as the most aggressive developer at land auctions, withdrew at a bid of HK$3.96 billion, having come to the auction after it had already spent 6.3 billion yuan on two prime residential sites on the mainland which it plans to develop either alone or through a joint venture.

One of its new land parcels - a prime residential site with a potential gross floor area of 11.08 million square feet in Chongqing in which it has a 50 per cent stake - fetched a record price of 4.18 billion yuan when it was auctioned on July 30.

Sino Land also stunned the market by beating all-comers at an earlier auction on July 21 and paying 4.13 billion yuan for a Chengdu residential site with a potential gross floor area of 13.4 million sqft, and Henderson Land Development has acquired a residential-commercial site in the Xiangcheng district of Suzhou for 670 million yuan and another residential plot in Yixing for 158 million yuan.

In Hong Kong, Sun Hung Kai Properties won the bidding for a waterfront residential site in West Kowloon last month with an offer of HK$5.56 billion, which was about 13 per cent below the top-end forecast of HK$6.4 billion.

The lacklustre turn to bidding comes just two months after land-hungry developers were still at war with one another for local sites, pushing the prices for two residential sites in secondary location Tuen Mun to a combined HK$1.74 billion - at the top end of a market forecast of between HK$1.3 billion and HK$1.9 billion.

On May 29, Manhattan Realty paid HK$960 million or HK$4,604 per square foot for a site at Tsing Lung Road, while Chinachem Group bought a plot at Tsing Fat Street for HK$780 million or HK$3,271 per square foot. Both winning bids were towards the higher end of market expectations.

Property consultants initially blamed the reverse in the bidding tempo since these auctions on strong protests from environmental groups to the high-rise developments planned for the two sites.

However, Jonas Kan, a director of equity research at Daiwa Institute of Research, said developers were simply no longer keen to pay big premiums for land as they had acquired sites aggressively over the past two years.

'In future, only development sites in unique or unusual locations, or sites that offer the potential to package future projects as high-value developments, will draw fierce bids. Otherwise, developers will probably become less aggressive,' he said.

Higher investment returns available on mainland projects was another factor behind the focus switch by local developers, analysts said.

Home prices in the mainland's 70 leading cities rose 6.4 per cent in June from May, according to the National Development and Reform Commission. In contrast Centaline Property Agency's Centa-City Index, which includes the transaction prices of secondary flats in 45 of Hong Kong's housing estates, showed that property values fell 0.25 per cent last month from June.

Foreign direct investment in the mainland's property sector rose 124 per cent year on year to US$3.3 billion in the first quarter of this year, after rising 52 per cent to US$8.2 billion for last year, said Xavier Wong, the head of research at Knight Frank.

Chengdu, a region highly sought after by Hong Kong developers, was among the hottest targets of these investment flows and local developers have snapped up more than 330 million sqft of land in the area, according to a survey conducted by Centaline China's Sichuan office.

However, leading developers challenged the view that their mainland focus was chiefly responsible for the lower-than-expected land auction results and said the outcomes arose because of over-optimistic forecasts made by surveyors and property agents.

'They are making inaccurate forecasts. We, the developers, made our bids to truly reflect the market as we are well aware of potential buyers' purchasing power,' said Victor Lui Ting, an executive director of Sun Hung Kai Real Estate Agency.

But Mr Lui conceded that increasing attention towards investing in mainland property might have 'slightly' distracted developers' attention from their home market.

Wharf director Ricky Wong Kwong-yiu said Hong Kong developers had adopted a two-pronged strategy - building up land banks in the city and in the mainland. 'Developers are more aggressive in acquiring land in the mainland as land values in second-tier cities are still at a relatively low level,' he said.

A spokeswoman at Sino Land said the company would continue buying land in the mainland when opportunities arose. 'But our main investment focus is still in Hong Kong,' she said.