The massive job cuts at Cathay Pacific, Hong Kong’s flagship carrier, are likely to further drag down the city’s flagging property market, with districts close to the airport potentially facing steep cuts in home prices and rents, according to analysts.
The embattled airline’s announcement on Tuesday that 5,900 jobs would be axed, including cabin crew and pilots, will further increase the number of jobless residents in Hong Kong, which rose to a near 16-year high of 6.4% in the third quarter as the city reels from the impact of the coronavirus. The unemployment rate climbed 0.3 percentage points in the three months to September, bringing the total number of people out of work to 259,800.
According to research carried out by Knight Frank, there is a strong inverse correlation between unemployment and house prices in Hong Kong. A spike in the jobless rate typically leads to a fall in home prices one or two months later, said Martin Wong, associate director, research and consultancy, Greater China, at Knight Frank.
“By this logic, it is likely housing prices will fall in the fourth quarter. For home rentals, as there has been