The Government has lowered the reserve price for the sale of its latest batch of 94 surplus government quarters by 15 per cent in response to the sharp downturn in property prices. The Government Property Agency's (GPA) chief property manager, Francis Shum Kwok-sher, said the decision to lower the reserve price was taken as a result of negative sentiment in the market. 'The reserve price has to take into account the current interest rate situation and the recent drop in property transactions,' he said. This will be the third batch of surplus government quarters released for sale this year following the sale of 55 units at the previous sale, which generated $825 million. If all 94 surplus government quarters are sold they should generate at least $1.27 billion for the government. The tender will take place in three stages. The first stage involves 14 flats - measuring from 1,520 square feet to 2,519 sq ft - at Happy Villa at Lai Chi Kok, Wilshire Towers in Tin Hau Temple Road, Tin Hau, Unicorn Gardens at Shouson Hill and Macdonnell House in Mid-Levels. Reserve prices for the 14 units range from $7.5 million to $15.6 million or $4,934 per square foot to $6,192 per square foot. The tender for the first stage will close at noon on November 25. A further 80 Baguio Villa flats, at Pokfulam, will be available for sale in two separate stages on December 4 and December 30. GPA administrator Albert Lai Kwok-yin said the Government would not refer banks to provide mortgage lending for prospective buyers nor extend the completion date to boost sales. Undaunted by the recent abrupt change in sentiment, the GPA is sticking to its sales programme of surplus government quarters. 'The Government will not consider holding back the sales because the purpose of selling these flats is not for profit,' Mr Lai said. 'We have to honour our commitment to increase supply of large-sized units to meet demand in Hong Kong.' Two units at Wilshire Towers which received no bids at the last sale will be put on sale this time, he said. The GPA will release a further 111 units of surplus government quarters for sale before March 31 next year.