More than 10,000 buyers are competing for 34 subsidised flats put up for sale to people whose income is too high to qualify for public rental flats and too low to otherwise afford to buy a home.
It means they have a 300 to one chance of securing one of the flats in the tourist village of Tai O, on the western coast of Lantau Island.
Another 52 flats are being offered to buyers living in public rental flats - for which only 56 applications had been submitted as the deadline neared yesterday.
All 86 flats in the Lung Tin estate are former public rental units. Built in 1995, their average size is about 480 sq ft and they are priced between HK$640,000 and HK$900,000 - 70 per cent of the market rate.
"The prices are too attractive. They are even less than the down payment for a parking space," said Professor Chau Kwong-wing, a real estate professor at the University of Hong Kong.
He said the project had caught the attention of private-market buyers as the public did not think property prices would fall in the short run amid doubts that the government would hit ambitious flat-building targets.
"It has been difficult for the government to push through its housing projects," Chau said, referring to opposition to its development plans.
In February last year, the Housing Authority proposed converting one 12-storey public rental block in the estate to Home Ownership Scheme flats as more than 80 per cent of the homes were vacant.
The HOS is intended to offer affordable housing to buyers who cannot afford private property but are too well off to qualify for public flats.
For the Tai O project, sales are limited to those with monthly incomes of no more than HK$22,000 for a single buyer and HK$40,000 for a household.