Viewed as a barometer of future property price trends, yesterday's Shenzhen land auction was inconclusive. As a transparent exercise in the disposal of public land it marks a big step forward. The days of large tracts of Guangdong land being carved up in karaoke lounges looks to be closing. The absence of SAR developers was significant and should temper wilder notions about the lure of mainland property. Hong Kong firms are no strangers to old-style backroom land deals, but if they are paying full market price at a public land auction they prefer to be in a liquid and tightly regulated market with the comfort of a convertible currency. This is the big difference between Hong Kong and Shenzhen that means the two jurisdictions will remain distinct markets for many years to come, despite slowly converging price levels and an anticipated increase in cross-border commuting that, for now, remains more hype than reality. Yesterday's auction netted the Shenzhen Government 2.23 billion yuan (HK$2.09 billion) and it has much more to sell. The risk is that it seeks to manage land supply in the same fashion as the Hong Kong Government and ends up with a similarly skewed fiscal system. A positive outcome is that Hong Kong firms were forced to show their hand. Without a lead from major local developers many would-be SAR buyers may think twice about a Shenzhen purchase. As savvy judges of risk the SAR's big firms have continued a track record of committing minimal capital sums to speculative mainland ventures which reveals much. In the long run property prices are dependent on the purchasing power of the population. On this basis Shenzhen looks expensive. By contrast the SAR is approaching record levels of affordability compared to average incomes. Despite worsening local unemployment and external economic uncertainty, such fundamentals may explain the fact that SAR developers only showed up to watch in Shenzhen.