The government has taken over total control of land supply from developers by scrapping the application list system.
Secretary for Development Paul Chan Mo-po announced the end of the system, which has operated since 1999, yesterday.
He said the government had been releasing sites for sale, without waiting for developers to bid for them on the application list, since the end of 2011.
But he added: "The public misunderstood that the control of land supply remained in the hands of developers. We decided to scrap the system to clear all doubt. We want to make sure we can fully control the land supply.
"Even if there was an adjustment in the property market, we would continue to sell sites that could provide … 13,600 flats in the coming financial year."
The government will now release a schedule for land sales every quarter.
Chief Executive Leung Chun-ying said: "This could also help small developers join in the bidding for government land."
Under the system, developers would submit bids for the sites on the list. If a bid reached about 80 per cent of the government's undisclosed reserve price, an auction would be triggered.
In the first few years, the government maintained regular land auctions and did not rely on the application list system. But in November 2002, when the property market fell, the government suspended regular auctions and switched totally to the list system.
Although the property market has soared since the fourth quarter of 2003, the government refused to resume regular land auctions, saying the list system could reflect market demand for land.
It was not until 2010 that the government announced it would take the initiative to sell land if the application list system failed to generate enough sites for sale.
The Lands Department has received just seven applications for sites since April last year.
Shih Wing-ching, founder of Centaline Property, supported the change in policy. He said: "Land supply should not be controlled by the developers. It should be controlled by the government, which should provide sufficient land based on housing demand and town planning."
Democratic Party lawmaker Albert Ho Chun-yan said the abolition of the list system was long overdue.
"It has become useless, since the government resumed regular tenders in the past few years," Ho said. "Cancellation is not enough - the government should take out land for sale every month."
Stewart Leung Chi-kin, chairman of the Real Estate Developers Association of Hong Kong, said the change would have a limited impact on developers' interest in bidding for land.