The fragile state of the property market was underlined yesterday as two more leading developers announced flat sales at heavy discounts. New World Development said it would offer flats in its Belair Monte project in Fanling at below development cost, while Cheung Kong (Holdings) said it would make no profit on initial sales of luxury apartments at its DeerHill Bay development, Tai Po. The latest cut-price sales come a week after Henderson Land Development reduced prices 10 per cent in one project and offered flats in another at 11 per cent below the secondary market. The discounts are at odds with property tycoons' and analysts' repeated statements that the market has bottomed. Cheung Kong chairman Li Ka-shing this week said the homes market was showing strong signs of recovery. Last month Sino Land chairman Robert Ng Chee Siong said, after a strong response to the company's Island Harbourview project in Tai Kok Tsui, that the market had bottomed out and buyer confidence restored. Warburg Dillon Read, Lehman Brothers, Morgan Stanley Dean Witter and Tai Fook Securities have all issued optimistic forecasts in the past two months. Analysts yesterday said the latest sales indicated caution over the demand for homes, which they warned would be dampened by the slowing economy and high unemployment. New World said the first 128 flats at Belair Monte, a joint venture owned by 11 developers, would go on sale on January 3 at $2,750 per square foot, while the development cost was $2,870 per square foot. Buyer registration for Belair Monte, which comprises 1,680 units measuring 615 sq ft to 1,010 sq ft, would run from December 28 to 31. New World director Stewart Leung Chi-kin said: 'There is no guarantee the developer will make a profit in every project.' The development as a whole would be profitable, he said, implying prices would rise for subsequent sales. The project would generate revenue of up to $3.7 billion against a development cost of $3.2-$3.3 billion. Mr Leung forecast property prices would increase 10 to 15 per cent next year. Cheung Kong said it would launch 20 flats at DeerHill Bay through internal sale at $5,895 per square foot - 45.4 per cent down from the average $10,800 per square foot for the first units offered in November last year. Cheung Kong executive director Katherine Hung Siu-lin said units selling at this price would not make any profit for the company. She said the low-price strategy was used to boost interest. The firm would raise prices for subsequent batches. Ms Hung said $5,895 per square foot was below the average $6,500 per square foot valuation by a group of banks. Vickers Ballas Hong Kong analyst Herbert Lau Chung-kwan said developers were offering discounts as they wanted to speed up sales and raise cash as soon as possible amid a credit squeeze. The large volume of supply coming on stream and growing number of negative factors such as high unemployment had made developers cautious on pricing.