Last week's cool response to the auction of a large government residential site in West Kowloon had little impact on the residential sector but threw a pall over home prices in the area of the lot. Asking prices for Island Harbourview, at Olympic Station, adjoining the auction site, fell up to 3 per cent immediately after the land sale, agents said. Amoy Properties won the 217,430-square-foot residential site with Thursday's sole bid of HK$2.58 billion - the low end of the projected range of HK$2.4 billion to HK$3.3 billion. Ricacorp Properties managing director Barry Law Lam-wai said developers' cautious attitude towards the West Kowloon site was due partly to the future supply on the reclamation. Another two residential sites soon would be ready for sale. However, he said the enthusiastic response to Friday's tender sale of a residential site in Sai Wan Ho was positive. The tender drew nine bids. Among them were Sun Hung Kai Properties, Henderson Land Development, New World Development, Amoy Properties, Sino Land and Nan Fung Development. Mr Law said the response demonstrated developers' confidence in the future of the residential market. Meanwhile, home-owners at housing estates had refused to offer further discounts in anticipation of the tender generating an encouraging result, which indicated home prices had stabilised after a sharp fall of 8 per cent since October, he said. The company's transaction volume increased 20 per cent from a month ago. Midland Realty executive director Victor Cheung said transaction volumes and prices were about the same as the previous week. Sentiment also was affected by seasonal factors as the market normally began to quieten when Christmas was approaching. He expected buying confidence to be boosted if the Sai Wan Ho site fetched a good price. He expected it to sell for about HK$2.2 billion. Analysts said the market was still plagued by an abundance of supply and caution on the part of upgraders.