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CONFIDENTIAL # 機密
Chapter 4
THE PROPERTY SECTOR
22.
Building and construction. 1961 to 1975
45.
activities.
Jecause of the length of time necessary for building and
construction output to adjust to demand for property, building and
construction activity tends to be more cyclical than other economic
Despite its cyclical nature, building and cnstruction
activity in the past 15 years grew at a trend rate consistent with
the over 11 growth in the economy. The real average annual rate of
growth for building and construction activity and for the gross domestic
product from 1961 to 1976 were both 9. But during these fifteen years
there were periods when these two growth rates were very different.
46.
Between 1961 and 1965, building and construction activity
was growing at a real average annual rate of 23% compared with 12 for
the gross domestic product. This was made possible by the rapid expansion
in bank lending for property development and an over optimistic reaction
by developers to an increasing demand for property. Not surprisingly a
situation of over supply developed. The impact of this over supply
triggered the 1965 banking crisis which together with the disturbances.
in 1967, in turn reduced the demand for property in the private sector.
Public sector demand also fell off, principally because of a reduction
in expenditure on public housing from HR137 million (constant 1966 prices)
in 1967 by an annual average of 16% to HK$58 million at constant prices
in 1972.
47.
Thus the price of property fell sharply, aggravating the loss
of confidence in the market. Building and construction activity declined
by 12% per annum in real terms between 1965 and 1969, in contrast to a
CONFIDENTIAL
/real
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