VILLA ESPLANADA, the first large-scale residential project to go on sale since Tung Chee-hwa confirmed the 85,000-flat-a-year public housing target was no longer government policy, received an overwhelming response from buyers yesterday. Developers said they received more than 3,702 applications from prospective buyers for 960 flats put on sale for phase three of the project, with more than 85 per cent of them snapped up in a matter of hours. The project was expected to be sold out by the end of the day, said a spokesman for the developers. The estate, next to the Tsing Yi MTR station, was jointly developed by China Resources Enterprises, Sun Hung Kai Properties and Cheung Kong (Holdings). It has a site area of 440,000 square feet, being developed in three phases with 10 residential blocks of 35 to 40 storeys. Property agents said the strong interest was the result of positive sentiment generated by the Chief Executive's confirmation that the 85,000-flat target had been dropped. They say the number of potential home buyers for new projects has risen 20 per cent in the past week. The strong interest also prompted the developers of Villa Esplanada to raise prices for the latest batch of 200 flats by 13.5 per cent to $3,800 per square foot. The rise did not deter potential buyers. Eric Chow Kwok-yin, general sales manager of Sun Hung Kai Properties' marketing arm Sun Hung Kai Real Estate Agency, said most were end users and first time buyers. Yang Meihao, Fortune Realty's Tsing Yi branch manager, estimated that 20 per cent of the buyers were investors. She expected some of the flats to come into the secondary market after a few months. However, some agents warned that despite the firming of the market, it might be premature to assume prices had bottomed out. 'There has been no obvious improvement in transaction volumes in the secondary sector because the market is still dominated by the primary market,' said Shih Wing-ching, managing director of Centaline Property Agency.