Average New Rents* for "Uncontrolled" Domestic Tenancies, 1970–1973
Table 24
(HK$ per square foot)
Small
tenements
Large tenements
Small
Medium
Large
flats
flats
flats
1970 (Jan-Jun)
1.19
0.95
1.49
1.76
1.93
(Jul-Dec)
1.36
1.04
1.62
2.17
2.44
1971 (Jan-Jun)
1.48
1.23
1.87
2.38
2.70
(Jul-Dec)
1.68
1.28
2.08
2.80
2.67
1972 (Jan-Jun)
1.94
1.41
2.48
2.48
3.18
(Jul-Dec)
1.78
1.49
2.52
2.93
2.67
1973 (Jan-Jun)
2.44
1.79
2.89
3.01
3.41
* that is, rents for fresh lettings.
64. Because of the continuing upward move- ment of rents for "uncontrolled" premises and, in particular, its rapid acceleration in the first half of 1973, a “rent freeze” for these tenancies was introduced in June 1973. This was followed at the end of the year by more com- prehensive legislation providing security of tenure and controlling rents and rental increases for virtually all domestic tenancies in the private sector in existence at the date of its introduction, namely, 15th December 1973. The rents for newly built accommodation, and for existing premises which become vacant, remain freely negotiable and thus the legislation does not deter new development.
65. Towards the end of 1973 there were signs that the rate of increase in rents for "uncontrolled" accommodation was beginning to decline and, to an extent, this may be a consequence of the improving supply of do- mestic accommodation in the private sector. The number of domestic units certified for occupation in recent years is shown below:
1969
7,764
1970
11,140
1971
12,242
1972
20,589
1973 (first half)
14,186
(b) Shop Rentals
66. Table 23 shows that on average shop rents were 18% higher during the first half of 1973 than during 1972 when they increased by 17%. In those cases where rents were actually increased, the average increase was of the order of 52% compared with 42% in 1972. Between January 1972 and January 1973,
22
vacancies in shop premises increased from 961 to 1,156 but there was a further increase, to 1,825, by July 1973. However, this increase in vacan- cies was not significantly affected by higher rents and, in fact, in July 1973, only about 10% of the shops vacant were in primary trading locations. (c) Office Rentals
67. It will be seen from Table 23 that the average rent for office tenancies, renewed or freshly created, increased during the first half of 1973 by 38% compared with 15% in 1972. One possible explanation of this is that in 1972 there appears to have been a considerable increase in demand for office space and, with work on a number of projects being delayed, this could have resulted in rentals increasing much more rapidly in the first half of 1973. The supply position improved slightly in 1973; some 370,000 square feet of accommodation was completed in the first six months of the year and an estimated 1 million square feet was completed during the second half. But demand did not seem to slacken during the year.
(d) Commercial Flatted Factory Rentals
68. The average rental paid for flatted factory accommodation increased by 6% in the first half of 1973, as is shown in Table 23, but, in those cases where rents were actually increased, the increases were of the order of 19% compared with 28% in 1972. However, the supply of commercial factory space was adequate to meet the demand; some 3 million square feet of factory space was vacant in July 1973 and a further 3 million square feet was expected to be completed during the second half of the year. Towards the end of 1973 there was evidence to suggest that rentals were beginning to decline.