Fierce bidding for three luxury residential sites at yesterday's land auction suggests government efforts to cool the overheated property sector are failing to make an impact. Sun Hung Kai Properties outbid four others to win the former Lingnan College site on Stubbs Road, the most anticipated land lot in the auction, for HK$4.49 billion or HK$24,829 per buildable square foot. It represents the third most expensive residential site auctioned in the city in terms of price per square foot. Victor Lui Ting, executive director at Sun Hung Kai Real Estate Agency, said the firm planned to invest HK$8 billion on a low-density residential project on the site. Bidding for the two other sites was hotter than expected. The Ngau Tam Mei land parcel in Yuen Long was won by Cheung Kong (Holdings) after 81 offers from 12 bidders. The winning HK$662 million bid, equivalent to HK$6,548 per sq ft, was significantly higher than most market forecasts, which ranged from HK$410 million to HK$525 million, although one firm forecast HK$700 million. 'It's a valuable site and has great potential,' said Grace Woo Chia-ching, an executive director at Cheung Kong. 'It's very rare to have a site where you can have a really low density development with houses that have their own gardens.' The developer is planning to build more than 60 detached houses, with a construction cost of about HK$4,000 to HK$5,000 per sq ft. China Overseas Land and Investment won the site on 62 Begonia Road at Yau Yat Chuen in Kowloon Tong for HK$579 million after a battle between five bidders submitting a total of 89 bids. The price of HK$15,742 per buildable sq ft was the third highest selling price per square foot in Kowloon. Most surveyors had not expected the site to fetch more than HK$15,090 per sq ft. 'We are looking for a selling price of HK$26,000 [per sq ft for the completed flats] in future so ... the land value of about HK$15,000 per sq ft is very reasonable,' said China Overseas Property Agency's director Tony Yau. The developer plans to build 10 houses between 3,000 sq ft and 5,000 sq ft each. The entire development would cost about HK$850 million. Cusson Leung, an analyst at Credit Suisse, said the results sent a strong signal many developers were optimistic about the property market outlook. 'The three sites are located in different areas. But they were acquired by three different developers who bid aggressively for them. It is not just a single transaction. It shows how the developers feel about the market,' Leung said. 'The average selling price of the Stubbs Road project has to reach HK$34,000 per sq ft in order to reach reasonable profit. But selling prices for second-hand flats in the area range between HK$25,000 and HK$26,000 per sq ft. That shows that the developer expects property prices to rise,' he said. Despite the government's move to release more sites for sale in recent months, Savills Valuation managing director Charles Chan Chiu-kwok said the increased supply was failing to cool the market. 'They don't have long-term planning for land supply and they have cut the development density of the sites. That's why developers are willing to bid aggressively. They're worried about a possible shortage of valuable sites in future,' he said. Auctioneer Graham Martin Ross said he was content with the results. The government would not just concentrate on one part of the market, but would also sell land for the mass residential market. Data from Jones Lang LaSalle showed that luxury residential prices grew 8.3 per cent in the first quarter.