New land policies should stabilise the property market but further intervention by the Government will destroy public confidence, according to an estate agency. Chesterton Petty said the Government's approach to managing land supply had become more flexible and transparent. The more certain land-supply timetable allowed developers to plan ahead, it said. 'However, the depressed residential market is just beginning to turn around; we have not witnessed any conspicuous stabilisation effects,' Chesterton Petty said. 'In any event, the Government should try not to intervene in the market with administrative measures, such as halting land sales or withholding sales of major land parcels.' Intervention disrupted developers' plans and destroyed public confidence, it said. 'The market, left to itself, should better handle any imbalance between supply and demand,' Chesterton Petty said. Residential land prices last year dropped to the levels of 1992-93, down 62 per cent from the peak in 1997. However, home prices fell only 40 per cent in the same period, it said. This larger decline in residential land prices reflected developers' pessimism on the market's future. Developers' land cost - prices paid at public auctions and in tenders - had been considered an important indicator of future home prices. When the market was climbing during the 1980s and the 1990s, land-price movements could certainly indicate future property price trends, Chesterton Petty said. However, when the market became more volatile, such as the period after mid-1997, developers' expectations might not materialise and this relationship might not hold true, the estate agency said.