Executive director Danny Cheung Shiu-kit said the consortium intended to build 120 to 135 luxury homes, each measuring 3,000 to 4,000 sq ft. The site would be terraced with 35 to 40 homes sitting on several levels.

'Each group of houses will be above the other in a terraced fashion so that each home will enjoy spectacular views,' Mr Cheung said.

China Overseas has a 30 per cent stake in the project, with the remainder held by partners Paliburg Holdings and Regal Hotels International.

Mr Cheung estimated that the up-market project would cost the consortium $16,000 to $17,000 per sq ft to build.

While it was too early to guess at a final price, he estimated that each of the detached or semi-detached homes would cost at least $60 million.

A decision on whether to pre-sell the units would be made in about three months.

The developers bought the Wong Ma Kok Road site on June 3 for $5.5 billion, or $12,800 per sq ft.

Mr Cheung described the price as relatively cheap - one of the main reasons the partners had purchased the land.

He expected that government moves to curb speculators in the residential market would have little impact on sales of the houses.

Demand for such luxury housing would ensure that they would be sold, he said.

However, Mr Cheung predicted a period of consolidation for the mass residential sector over the coming months.

'The drastic increase in property prices in the last few months is really deserving of some sort of adjustment,' he said.

The advent of the SAR Government and Chief Executive Tung Chee-hwa's comments about reining in speculators would lead to a short-term consolidation in the market.

'We are undergoing some sort of adjustment and things will remain stable for an extended period of time.' If Mr Tung increased the supply of land for more housing, it would help drive speculators from the market.

'From my point of view that is good for homeowners and for developers,' Mr Cheung said.

He was not concerned that transaction levels had dropped markedly in the past month or so by 60 to 70 per cent.

'Even with only 40 per cent transactions, the market is still very active,' he said.

'There are some properties which are being transacted more than one time [confirmor deals].

'We are having a lot more deals being transacted than there should be. So the drop that we are seeing is a drop in confirmors.' In the long run, Mr Cheung said that there would not be any major upturn or downturn in the residential property market despite an increase in land supply.

Meanwhile, China Overseas would launch its twin-tower, 17-storey Hyatt Place residential development in Ma Tau Wai for sale, Mr Cheung said.

The retail podium comprising 40,000 sq ft on the lower floors of the project already was 50 per cent let.