Financial Secretary John Tsang Chun-wah yesterday warned major developers that the government would intervene in the property market if it became 'unfair' and 'unhealthy'. The threat of government action is being seen as an attempt to head off possible overheating in the housing market, as officials have previously cautioned against direct intervention and policies that might lead to property prices falling. Tsang told representatives of the Real Estate Developers' Association in a one-hour meeting that the public was concerned about rising property prices, particularly those for luxury flats, according to a person at the meeting. The finance chief said there were public concerns that rising prices for luxury flats would trickle down to the mass housing market. 'The financial secretary said he was concerned that sales tactics such as controversial floor numbering and suspected forged property transactions would lead to public doubts about the credibility of the system,' the person said. He said Tsang told the developers the government's policy was to maintain a healthy development of the property market and hopefully not to intervene in the market. 'Tsang said if the property market became unfair and unhealthy, thus affecting the overall economy and people's livelihoods, the government would need to intervene.' Tsang did not elaborate on what measures the government would take. Measures touted by the government in the 1990s to quell rampant property speculation included requiring developers to put all flats for pre-sale onto the market within six months of the issuing of government approval for sale, and extending the pre-sale period of flats by three months to 15 months before the estimated date of completion. The Hong Kong Monetary Authority last week lowered the mortgage ratio of luxury properties valued at more than HK$20 million from 70 to 60 per cent. Fears about affordable housing rose this month after a duplex at a new Henderson Land Development project at 39 Conduit Road sold for HK$439 million, or a record HK$71,280 per square foot, despite the impact of one of the world's worst economic recessions. Property industry observers have condemned a ploy by Henderson to skip 48 floor numbers in the block so that it can market the top two floors of the project as 68 and 88 - both lucky numbers in Chinese numerology. Top executives of developers who met Tsang yesterday included the association's vice-president, Stewart Leung Chi-kin - an executive director of New World Development; association executive committee chairman Keith Kerr; Thomas Kwok Ping-kwong, Sun Hung Kai Properties deputy chairman and managing director; Victor Li Tzar-kuoi, Cheung Kong deputy chairman; and Robert Ng Chee Siong, chairman of Sino Land. Wheelock Properties executive director Ricky Wong Kwong-yiu and Great Eagle Holdings chairman Dr Lo Ka-shui were also present. Ways of improving the land application system, under which government sites are released for auction, were also discussed. No agreement was reached, but the parties agreed to keep talking on the issue. Leung said the association fully backed the government's system for making land available for sale through an application list but raised the possibility of tweaking the mechanism. Specifically, he said the government should set its reserve price at levels closely reflecting market prices. He said the issue was not about increasing the discount to the reserve price for bids triggering sales - now 80 per cent - as the sites still needed to be auctioned. 'Is there room to fine-tune the system? We want the government to set the reserve price closer to market levels. This will increase the chance of successfully triggering sites for auction,' Leung said after the meeting. The existing system allows developers to trigger sites for auction if their bids are sufficiently close to the government's reserve price, which is not disclosed.