CONFIDENTIAL
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3-
7.
Tourism continues to expand, with the number of visitors in 1969 rising by 23.7%. This has already given rise to a severe shortage of hotel rooms; but a number of building projects are under way which will increase hotel accommodation by over 30% when completed over the next few
years.
A
8.
During the past year there has been a marked revival of interest in the property market, which has been in the doldrums since 1965. 730 new building schemes were approved in 1969, more than double the number approved in 1968. This reawakening of interest is reflected in the record prices paid at the auction sales of Crown land for industrial use. 600,000 sq.ft. were sold in the last 6 months of 1969, and the auction of a very prominent non-industrial site in Kowloon fetched a record price of $130 million, payable by instalments over ten years, in November 1969. total of 1.25 million square feet of industrial land in the new town of Kwai Chung in the New Territories was also the subject of exchanges for existing agricultural land during 1969.
There has been a reduction in recent years in the construction of both industrial and domestic accommodation and this has led to many tenants receiving notifications of increases in rents, particularly in the latter half of 1969. The present shortage of industrial floor space should be remedied by the end of 1970, when an estimated 61⁄2 million square feet of new flatted factory space and 1.7 million square feet of floor space in individual new factories are expected to have been completed. The shortage of, and the resultant rise in rents for flatted factories is therefore short-term and would not justify overriding the strong objections of economic principle to interfering with the free play of market forces in this field, over and above the enforced six months' period of notice of termination of tenancies of post-war premises already required under existing legislation.
9.
10.
The position in post-war domestic accommodation has on the other hand been felt sufficiently serious to justify action to restrain rent increases until supply more nearly satisfies demand. Legislation to this end has accordingly been enacted and further legislation is contemplated.
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CONFIDENTIAL