HONG KONG'S swelling unemployment and doubts over job security amidst general economic gloom will curb home buying and hit property companies' bottom lines say analysts, who see results taking a hit following a tumultuous week.
Property companies have slashed prices in a bid to attract customers, a move certain to hit profits.
'Prior to the announcement, Henderson [Land Development] saw 4 per cent off 1998 and 7 per cent off 1999(earnings) and that will be the case across the board, although Cheung Kong may be a bit lower,' Paribas Securities property analyst Andrew Taylor said.
Henderson raised $2.24 billion to invest in the local property market through property subsidiaries holding stakes in the Sheung Shui Centre and Metro Plaza.
Sun Hung Kai Properties cut its prices for a development after Cheung Kong asked below-expectations prices for flats at a nearby project. Wheelock and Henderson followed suit.
DBS Securities senior manager Winnie Chiu saw no rise in property developers' earnings across 1998 with a marginal dip for some.