The Government's move on Friday to prop up the crumbling property market seems to be paying off early - if the brisk sales of units in a major development in Sha Tin yesterday is any indication. Sun Hung Kai Properties' (SHKP) Prima Villa development received a good response from prospective buyers, bolstered by Friday's announcement that the Government would stop the sale of 16,000 subsidised flats, and instead rent them out. SHKP has 1,024 units at its Sha Tin Prima Villa development. It sold 200 units earlier in the week, and yesterday put another 821 up for sale. The sale was heavily over-subscribed, a SHKP official said. A total of 2,324 applications were chasing the flats - small to medium-size family units of less than 600 square feet. A computerised ballot system was used to select purchasers, the SHKP official said. 'We had an excellent response. It was very crowded and busy here all day. We will definitely have sold all of them by tonight.' The units had been sold for an average price of HK$3,982 per square foot. The majority of buyers were locals from the Sha Tin area, from public housing and the Government's home ownership scheme (HOS). Property agents in the area said the sale was a good indication that the property market was consolidating, mainly due to hints from the Government that it intends to boost the real estate market. 'The sale of Prima Villa was brisk mainly because of the Government announcement on Friday. It is good news for the property market and a sign that it is on the mend,' Centaline Property Agency district manager for Sha Tin Chris Lo said. Ricacorp Properties senior district manager Johnny Wong said the units' pricing was well within market expectations. Prospective buyers of Prima Villa units welcomed the Housing Authority's move to hold up sales of HOS flats, saying this would help arrest their faltering confidence in the property market. 'I have a bit more confidence now because the Government has done quite a lot towards helping property prices,' a woman in the queue for Prima Villa units said. Prima Villa is the first private development on sale after the Housing Authority said it would convert 16,000 HOS flats to rental units and shorten the period between sales and the completion of HOS flats, which will effectively hold up the next sales for six months or so. The authority also said low-interest government loans would be increased to enable would-be HOS buyers to buy flats in the private sector or secondhand HOS flats. 'Now that the Government has finally decided to sell less HOS flats, this will help stabilise property prices,' another buyer said. Major developers also welcomed the authority's move, saying the measures would revive the property market. Several developers are expected to release more units in the market as buyers are weaned back to take interest in new flats. The Housing Authority's announcement came after pressure mounted on the Government to stop the price slide in the property market. A quarterly report released by the Bank of China Hong Kong-Macau Regional Office on Thursday said the Government should cut land supply and suspend the sale of subsidised housing. It said the residential market was likely to remain over-supplied while downward pressure on prices remained. It said some short term measures were needed to avoid a long-term depression similar to Japan's. The report also suggested that some large plots of land scheduled for sale should be withdrawn and put on to a reserve list from which sites would be released when developers showed interest. The Liberal Party had suggested that land auctions should be stopped to allow developers to apply for land according to market demand, and the rule forcing banks to lend no more than 70 per cent of the value of a property should be revised to 85 per cent. Property prices are estimated to have slumped by 50 per cent since 1997 peak, and although the economy has rebounded strongly since the Asian recession, property prices have continued to languish. On Friday night, Rosanna Wong, chairwoman of the Housing Authority, said that the HOS flats would be rented rather than sold between now and the 2003-4 financial year. There are now more than 100,000 families in the queue waiting for an average of five to six years for their subsidised flats. Ms Wong also said the authority would increase quotas for government loans to compensate for the loss of HOS flats.