remained
substantial (paragraphs 5.13 and 5.14) but fewer
building plans were approved (paragraph 5.12).
1.7
Since the second half of 1981, prices of residential
property have decreased substantially (paragraph 6.10).
Mortgage rates have also eased, from the historic high of 21%
in October 1981 to 16% at the end of the
the first half of this
year, leading to substantial reduction in monthly mortgage payments (paragraph 5.9). These factors, together with rising
household incomes, should have greatly enhanced the position
of potential home buyers. But there were still important
factors which induced them to continue to refrain from
committing themselves.
These include, inter alia, the
possibility of a further drop in flat prices, the uncertainties concerning general economic conditions and the
unfavourable influence on wealth of a sluggish stock market
(paragraph 3.15).
1.8
Compared with the first half of 1981, the total area
of land sold by the Government in the first half of this year
increased by 31%, made up of a decrease of 8% for industrial
land and an increase of 49% for non-industrial land (paragraph
5.16). Despite the lack of a reliable measure, it seems that
the price of land has declined further (paragraph 6.4).
Inflation and the monetary aggregates
1.9
indicated by the
The annualized rate of inflation,
various Consumer Price Indexes, slowed down further to 12% in
the first half, from 15% in 1981. Aggregate demand in the
economy was not imposing much pressure on the general price
level; and world prices continued to ease. Money supply (HK$M3) in fact decreased by 3% during the period (paragraph
3.4). Other factors, such as stable property prices and rentals, and the strengthening of the Hong Kong dollar also
contributed (paragraph 6.1).
3
/ 1.10 During