SINGAPORE (EDGEPROP) - Bargain hunters can expect bigger discounts on property in districts close to Hong Kong airport, as foreign pilots and flight attendants leave the city amid mass lay-offs at Cathay Pacific group.

Market observers say that areas like Tung Chung, Tsing Yi and Discovery Bay that were popular with the airline's employees could bear the brunt of the downturn. With the airline unlikely to resume full fledged operations until the coronavirus pandemic is brought under control, prices and rents in the area will come under further pressure, they added.

Anxious sellers have cut prices of flats in Tung Chung, the district closest to the airport, by 3 to 5 per cent in the wake of the lay-offs, agents said. They expect prices to decline by up to 10 per cent in the next six months.

A foreign staff of Cathay Pacific, due to retire early next year, had to increase the discount on the flat to 8 per cent to clinch a sale, said Andy Chan, district sales manager at Centaline. The 518 sq ft flat at Le Bleu Deux in Tung Chung sold for HK$7.33 million, HK$650,000 lower than the asking price.

Last month, the city's flag carrier axed 5,900 jobs and closed its regional carrier Cathay Dragon in a bid to stay afloat amid the coronavirus crisis. The pilots and flight attendants who survived the lay-offs have had to accept permanent wage cuts of up to 40 per cent. Compounding the issue is the city's rising unemployment rate, which has been pushed up to a near 16-year high in the June to September period by the coronavirus pandemic. The number of jobless people increased by about 11,500 to 259,800 during this period.

Simon Choi, district sales manager at Centaline Property Agency, said that with the government's Employment Support Scheme about to end, many more sectors might start laying off employees, cut salaries or adjust employment terms, which might further affect the housing market.

"As the social sentiment is not very good, homeowners' will not be too assertive and will be open to negotiations or even price cuts," Choi said.

He noted that prices in Tsing Yi could fall by around 10 per cent in the next two to four month, with sellers in older estates such as Tsing Yi Garden and Greenfield Garden likely to offer larger discounts.

In Tsing Yi Garden, prices of flats measuring 343 sq ft have dropped 18 per cent from HK$6 million at the peak of the market in the middle of last year to just HK$4.92 million this month, added Choi. "As family income reduces and [relative] mortgage burden increases, the entire Hong Kong will be affected, not just Tsing Yi," he said.

In Discovery Bay, however, some agents do not expect such steep decline in prices or discounts.

Prices may decline between 3 and 5 per cent in the next six months, said Victoria Allan, founder and managing director of agency Habitat Property. "At present, there may be drop in the higher end market for rents and sales, but I don't think there will be a drop in the lower [end] market," she said, adding that there has been a pickup in transaction activity because of more pilots selling.

Meanwhile, renters can also expect bargains in these districts.

Rents in Tung Chung dropped 5 to 8 per cent last week amid the lay-offs, said Alfred Cheung, senior sales manager at Midland Realty. They are now about 25 per cent lower compared to the peak reached in the middle of last year, he added.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.