Li's Cheung Kong (Holdings) bought a 7,551-square-metre waterfront plot in the city's Kowloon district for 3.51 billion Hong Kong dollars (450 million US), with around 150 bids placed in just over an hour.

The final price was nearly twice the opening bid of 1.77 billion Hong Kong dollars, and translates into a per-square-foot price of 9,597 dollars, making it the most expensive land in the district.

The whopping price exceeded estimates of 2.30 billion to 2.82 billion Hong Kong dollars from analysts polled by Dow Jones Newswires.

The blue-chip developer also bought another auctioned site, a 7,326-square-metre plot also in Kowloon, for 4.10 billion Hong Kong dollars.

The price was 43.5 percent higher than the opening bid and above the top end of market estimate of about 3.90 billion dollars.

Developers remained upbeat despite a series of government measures announced last week to rein in Hong Kong's soaring residential market.

House prices in Hong Kong surged nearly 45 percent from their trough at the end of 2008, while prices of some luxury flats have returned to, or surpassed, the peaks of the 1997 property boom.

"The new measures will not change the imbalance of supply and demand of residential buildings. The increase in land supply in recent months is not sufficient to satisfy the large appetite for residential flats," Charles Chan, managing director for Savills Valuation and Professional Services, told AFP.

The government said Friday said it would increase land supply and tighten mortgage lending to avoid a property bubble.

John Tsang, the city's financial chief, said the government would auction three more sites before March 2011, regardless of whether developers tabled an offer equal to at least 80 percent of the government's minimum price -- a requirement under the city's land auction rules.

Two of the three sites will be auctioned in September, he said.

"A large amount of hot money has flown into Hong Kong's financial system. Flat prices of some popular housing developments are fast approaching historic highs," Tsang said last week.

"There is an increased risk of a property bubble forming because interest rates are expected to continue to be very low for some time to come."

The Hong Kong Monetary Authority warned banks that the credit risks they faced in residential mortgages were rising and unveiled measures to help them cope.

These included lowering the loan-to-valuation ceiling to 60 percent for properties worth 12 million Hong Kong dollars (1.54 million US) or more. The ceiling for all non-owner-occupied residential mortgages would also be lowered to 60 percent.

Following Monday's declines on the Hong Kong stock exchange property shares rebounded in response to the better-than-expected auction results.

Sino Land jumped 3.61 percent to 13.76 Hong Kong dollars, Cheung Kong rose 1.05 percent to 100.40 dollars and Sun Hung Kai was up 0.46 percent at 110.50 dollars.

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