All kindergartens and primary schools in Hong Kong have been shut down for two weeks starting March 13 because of the outbreak of a flu-like illness, essentially speeding up the start of the childrenÆs Easter break. The government decided to issue the order to contain a seasonal flu outbreak and enable experts to look into recent deaths supposedly caused by the virus.

Three children in Hong Kong have so far died with flu-like symptoms, and another child has just been admitted to the intensive care unit in a hospital. Citi notes that on March 12 alone, 23 schools have been affected, with an additional 184 persons getting the virus. In less than a month, about 84 schools in Hong Kong already have been affected, the bank adds.

This flu scare, though so far contained among the schools affected, has brought back memories of the deadly Severe Acute Respiratory Syndrome (Sars) that hit Hong Kong in 2003.

The outbreak could potentially affect the home-viewing activities of homebuyers, resulting in a more quiet market, according to Tony Tsang, a property analyst at Citi. Together with continued weakness in the stockmarket, transaction volume in the secondary market could slow further in March. Sars had a crippling effect on Hong KongÆs property market, which took many months to recover.

ôWith these added uncertainties, bullish expectations of property price increases and transaction volume now built into earnings estimates might not be finally realised, leading to downside in earnings,ö Tsang writes in a report.

The outbreak is adding to CitiÆs sell recommendation on Sun Hung Kai Properties and Sino Land. The bankÆs top pick among the Hong Kong developers are Kerry Properties, which is now trading at 44% NAV discount, and Hang Lung Properties, which has a strong track record of timing the property market.

Tsang has been cautious on the property market in Hong Kong because of increased property supply over the past few months. He notes that supply in the secondary market has increased remarkably with an increasing amount of homeowners and investors releasing their holdings into the market. For example, the amount of units put onto the market for sale in the top 10 benchmark housing estates in Hong Kong has now risen by 29% compared with February levels. Meanwhile, transaction volumes have slowed and individual sellers have softened their asking prices, he says.