HONG Kong auctioned two pieces of land yesterday at prices that trounced expectations, sparking concern that overheating may continue to threaten the property market even after the government's recent cooling measures.

The auctions, the government's fifth so far this year, came just days after the government tightened mortgage lending for bigger flats, which caused transactions to more than halve over the weekend.

"This shows that developers think the latest measures won't affect the property market in the medium to long term," said Adrian Ngan, an analyst at CCB International. "The government's latest policies are additions to what it announced earlier. It seems to have curbed some speculation in the short term, but I'm not ruling out more measures if prices still don't come down."

Hong Kong auctioned a site in Ho Man Tin, Kowloon, for HK$4.1 billion (US$526 million). A Reuters poll of nine analysts had expected the 7,326-square-meter site to sell for HK$3.73 billion.

Another site in Hung Hom, Kowloon, was auctioned for HK$3.51 billion, beating estimates of HK$2.43 billion. The Hung Hom plot was 7,551 square meters.

Cheung Kong (Holdings) Ltd, owned by Hong Kong billionaire Li Ka-shing, won the auctions for both plots. Its shares ended yesterday up 1.1 percent.

"It so happened that the two pieces of land have excellent views and our colleagues have good developments plans for them," Cheung Kong Vice Chairman Victor Li told reporters after the auction. "I don't think the auction prices are an indication of our outlook for property prices."

A combination of low interest rates, ample liquidity and sound economic growth have pushed Hong Kong residential property prices up by almost 15 percent this year, after gaining a third last year.

Hong Kong Financial Secretary John Tsang said last week that prices for large flats had exceeded previous highs in 1997 and were headed toward historic peaks, prompting the government to raise stamp duty on luxury apartments earlier this year and implement more measures last week.

"Transaction volumes are going to slow in the next two to three weeks," said Ricky Poon, executive director at Colliers.