THE ECONOMY
As to wages, those in the wholesale, retail and import/export trades, in financing, insurance, real estate and business services, and in manufacturing had relatively larger increases, by 2-3 per cent in money terms or 4-5 per cent in real terms in September 2000 over a year earlier. Wages in personal services were flat in money terms, but up by 2 per cent in real terms. Wages in restaurants and hotels fell slightly by 1 per cent in money terms, yet with a marginal gain of 1 per cent in real terms. As regards transport services, wages were down both in money terms and in real terms, by 3 per cent and 1 per cent respectively, largely due to more new recruits at relatively lower pay with several land transport operators.
The Property Market
During most of 2000, the market for residential property was weak, as prospective home buyers were generally cautious about making purchase commitment in the light of an ample supply of new flats coming on stream, and as investors also stayed on the sidelines in face of the continuing uncertainties. In the first half of the year, sentiment was depressed by the three successive rises in the best lending rate in February, March and May, the worse-than-expected land auction results in April, and the plunge in local share prices during the second quarter. Market activity then picked up moderately in July and August, upon announcement of a programme of adjustment by the Housing Authority and clarification by the Government of its policy configuration on housing. Also stimulating acquisition interest were the more favourable mortgage loan packages being offered by the banks amidst keener competition for mortgage business. Market activity, however, eased back in the ensuing months, as buyers were held back amidst worries about a further correction
Property prices and rentals
(residential property)
Chart 14
Index (1999-100)
200
Price index*
150
100
Rental index
50
0
QI Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1995
1996
1997
1998
1999 1 2000
Flat prices fell further in 2000, continuing the downtrend since the third quarter of 1997. Yet flat rentals held broadly steady, having dropped appreciably in the earlier years. *Covering all completed flats, but excluding pre-completion flats.
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