THE weakened property market faces a crucial challenge on Wednesday when a prime residential site in central Kowloon - considered the biggest and best-quality lot of Crown land in recent years - goes under the hammer.
Despite its quality and good location, analysts are relatively reserved in their forecasts of the selling price for the 280,510 square foot site at Lung Poon Street, Diamond Hill.
Conservative forecasts put the price at $3.3 billion, while the most optimistic is about $4 billion.
The auction is a timely litmus test for the dampened residential market, with local developers lobbying hard for a relaxation of the 70 per cent ceiling for mortgage lending.
The Government's firm position on keeping the mortgage ceiling unchanged is expected to contain property prices.
It has been estimated that the restriction on mortgage financing has partly contributed to a drop of about 15 per cent in residential prices since last year.