Developers in Hong Kong are hoarding land, causing property prices to rise to stratospheric figures, according to the South China Morning Post.

It has reported that six major Hong Kong developers - Cheung Kong Holdings, Sun Hung Kai Properties, Henderson Land, Sino Land, Kerry Properties, and New World Development - are sitting on projects that could provide a total of 42.6 million square of living space when completed, or about 43,000 apartments averaging 1,000 square feet.

Professor Eddie Hui Chi-man of Polytechnic University’s building and real estate department, said: “As developers have massive land banks in hand, they have full control of when and at what price level to sell flats.”

The HK government has sold seven sites at auction in 2010 in an effort to undercut prices however it hasn’t had much effect. The remaining 39 sites on the Land Department’s application list which could be put up for sale, amount to only a sixth of the combined land that the top developers hold.

The HK government announced policies to cool the market which included banning re-sales before an initial deal has been completed on new flats, and increasing the down payment on sales above HK$12m (US$1.54m) from 30% to 40%.

The cooling measures initially appeared to work as apartment sales fell 50%. However the market heated up again after Cheung Kong paid HK$7.61bn (US$979.19m) – 30% higher than forecast – to buy two sites in an auction on August 17.