The Economy | 61
Overall labour wages in the private sector, excluding the irregular payment items, edged lower, by 1.3 per cent in money terms or 1.7 per cent in real terms in December 2004 from a year earlier. For 2004 as a whole, the corresponding decreases were 1.1 per cent and 1.2 per cent.
Analysed by economic sector, wages in the service sectors were adjusted downwards by 1.1-1.8 per cent in money terms in December 2004 from a year earlier, save for those in personal services, which were lifted by 1.8 per cent attributable to pay hikes at barber and beauty shops. In real terms, there were wage decreases of 1.6-2.3 per cent for most service sectors, but a 1.3 per cent rise for personal services. In the manufacturing and construction sectors, wages were down by 1.7 per cent and 2.6 per cent respectively in money terms, corresponding to decreases of 2.2 per cent and 3 per cent in real terms.
The Property Market
The property market continued to pick up markedly in early 2004 in terms of both prices and trading activity, as market sentiment improved during the economic upturn. The low interest rate environment amid keen competition in the mortgage loan market rendered further support to the property market. Following a brief consolidation in mid-year caused by concerns over higher interest rates, economic tightening measures in the Mainland and the oil price upsurge, the property market perked up again in the latter part of the year as local economic fundamentals continued to strengthen and deflation ended. The sales market for residential property appeared to have been stimulated by favourable land auction results in June and by removal of the security of tenure provisions for domestic tenancies in early July. Expansion of the Mortgage Insurance Programme between late July and the year-end also helped lift end-user demand.
The sales market for residential property was buoyant for 2004 as a whole, with particularly hectic trading activity in the secondary market. Flat prices in both the mass market and the luxury market rose markedly during the year, particularly in the luxury market. On a quarter-to-quarter comparison, flat prices in the first quarter of 2004 registered the first double-digit increase in the past seven years, followed by modest rises in the ensuing three quarters. By the fourth quarter of 2004, overall flat prices have soared by an average of 30 per cent over the same quarter in 2003, the highest price level since the fourth quarter of 2000. As to the rental market, flat rentals picked up steadily throughout 2004, and were 11 per cent higher in the fourth quarter of 2004 than a year earlier. Yet compared with their peaks in the third quarter of 1997, flat prices and rentals in the fourth quarter of 2004 were still substantially lower, on average by 51 per cent and 42 per cent respectively (Chart 13).