SUN Hung Kai Properties will no longer undercut the secondary market to sell new flats now that buying sentiment is improving, according to company sales manager Alfred So. Mr So said the residential market was in a turnaround and prices would not fall further, barring unforeseen circumstances. With the pick-up of activity in primary and secondary markets, he said home prices might even increase in line with inflation. Mr So said the company would pitch prices at market levels. He said the company had not changed the prices of its Woodland Crest development in Sheung Shui. Price differences in the three batches of units put on sale were due to variations in level, direction and quality of view they commanded, he said. The group sold the first 96 units at $3,497 per square foot, and the next 60 units at $3,639. It is offering the third batch, of 60 units, at $3,528 per sq ft. Mr So said that as the market was now dominated by end-users, it was appropriate for the government to relax controls on the residential sector. 'The measures were introduced to curb speculation. Now that speculators are out of the market, the government should loosen its grip for the market to perform in a normal way,' he said. Mr So said officials had recently given conflicting signals on whether it would relax its anti-speculation measures. 'One official indicated that it was considering some sort of relaxation, but another official said later that it was not,' he said. This indecisive attitude would only add uncertainties for home-buyers, developers and the market, he said. He said the Hong Kong Monetary Authority's latest call for a more conservative policy on co-financing mortgage schemes might be another concern to home-buyers looking for extra finance. In response, Sun Hung Kai would be more careful in extending its second mortgage loans, he said. According to Mr So, the company plans to sell other projects, including 12 units at Aegean House, in Clearwater Bay, and 36 penthouses of Royal Ascot, in Sha Tin. He said the 12 Aegean units, measuring about 2,100 sq ft, would be sold next week at $7,000 to $8,000 per sq ft. The Royal Ascot penthouses were expected to sell later at about $6,000 per sq ft, with some already reserved, he said. A sell-out of the penthouses would bring in up to $500 million.