New World Development managing director Henry Cheng Kar-shun has painted a bleak picture of the property market, saying the Government's new policy towards the sector has helped make it far less attractive.
He said the real estate industry was in new territory as uncertainty created by the Government's decision to impose a series of policies to regulate the sector could last for the next few years.
'The property development industry is no longer as attractive as in previous years. Profit margins are lower.' He said the net result of the policies was developers had difficulty knowing 'where the property market is going'.
Property prices have dropped more than 30 per cent since the handover.
Analysts said the decline was attributable to stock market turmoil and economic difficulties, but highlighted the Chief Executive's 10-year housing policy to provide annual flat supply of 85,000 units as a cause of uncertainty.
Mr Cheng said: 'I believe [the new Government] has abandoned the high-land cost policy.' He said the Government was trying to stabilise the residential market by keeping the demand and supply of flats in equilibrium.
To stabilise his company's income sources, Mr Cheng said the property conglomerate had decided to diversify by investing in bus operations.
