RESIDENTIAL prices and volumes in Tai Po are likely to come under pressure after a disappointing land auction. Asking prices for some residential developments in the second-hand market have softened by about five per cent, and transaction activity is likely to remain in the doldrums during the next few months, according to property agents. Tuesday's public auction of a 164,151 square foot residential lot in Tai Po was sold to CITIC Pacific after just one bid at the lower than expected price of $950 million. The sale of two other sites also disappointed the market, with a Kwai Chung godown site sold to the same developer at its opening price of $220 million, while a Yuen Long site was withdrawn after failing to attract an offer - the first time this has happened in 10 years, it is believed. ''Sentiment of both buyers and sellers was damaged by the unexpected sale result,'' said Eddie Yuen, associate director at property agency Centaline. Because of dampened market sentiment and more supply in the pipeline, Mr Yuen said some speculators were eager to reduce their stocks as soon as possible, and would possibly reduce asking prices to boost sales. ''Some of our clients have agreed to cut the asking price from $5,300 to $5,000 per sq ft in Classical Gardens, a medium-sized luxury property developed by Sino Land,'' he said. The property, which will be ready for occupation by the end of this year, is seen as an appropriate comparison with those sold at Tuesday's auction because both are medium-rise luxury residential developments comprising units of 800 to 1,000 per sq ft. Mr Yuen said the development was facing more pressure because a fresh supply of more than 200 units, which are in Sino Land's hands, might drag the price down further when they came to the market. He said some of the small and medium-sized residential developments in the secondary market were also facing price pressure because of poor sentiment in the sector. However, the reduction in asking price was not expected to boost sales activity because buyers would adopt a wait-and-see attitude. ''Some transactions which had already been finalised were suddenly deferred to be completed after the land auction,'' Mr Yuen said. Lawrence Wong, Midland Realty's Tai Po branch manager, said he did not expect a drastic fall in selling price, but the land-sale results would cause some pressure both in price and volume in the near term. The poor sentiment, however, did not affect some developers' residential sale programmes. Riviera Lodge, a residential property jointly developed by China Overseas Property and Gold-Face Holdings, is scheduled for sale on September 4. The registration programme begins on August 30 and ends on September 2. The development, with units ranging in size from 520 to 925 sq ft, is expected to be sold at an average price of $4,500 per sq ft.