NEXT week's government land auction will serve as the first true test of developers' sentiments following Governor Chris Patten's March 30 pledge to take steps to cool down spiralling home prices.
The two sites going under the hammer, one in Fanling and the other in Yuen Long, are expected to fetch a total of more than $4 billion, although bidding will hinge largely on what developers think will be the likely effect of any measures taken by the Government to slow down the market.
''Developers will have to make their own decision on what they think the Government can do,'' said Michael Clarke, managing director of Chung Sen Surveyors.
''If they think the Government can't do much, then they might be a bit more bullish with their bidding.'' Should they foresee a huge supply of new development land coming on stream which would dampen prices, they might think differently.
The special inter-departmental task force set up by the Governor to recommend how to tackle escalating home prices is not expected to report back to the Government until next month. In the meantime, developers will be left to use their best judgment on the auction floor.
When it does, an increase in residential land supply in the New Territories to help right Hong Kong's heavily imbalanced supply and demand equation seems almost certain to be on the cards.
