THE increase in the number of defaults on pre-sale flats has driven a brokerage to warn of a sizeable impact on some developers' forthcoming results.
According to a report by Worldsec International, Henderson Land Development Co's profits for the year to June 30 are expected to drop by 13 per cent, for instance, because customers have failed to abide by their purchase agreements.
Worldsec believes the estimated profits for Li Ka-shing's Cheung Kong (Holdings) for the year ended December 31 will fall two per cent because of potential buyer defaults.
Several other property companies in the territory could be similarly affected.
The biggest defaulters are said to have been speculators who signed up for pre-sale units in new developments before the market peaked in April last year and are now having difficulty in making their payments.
Having seen the prices of flats in new developments decrease by as much as 30 per cent, in some cases, over the past 10 months, and the cost of borrowing progressively go up, numerous buyers have questioned the point of finalising their transactions.