Chart 14
Index
200
180
160
140
120
100
80
60
40
20
Prices and rentals of office space
(1999=100)
Price index
Rental index
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2003
2004
2005 I
2006
2007
The Economy | 57
Office rentals made further gains in 2007 as demand for office space continued to be buoyed by extensive pick-up in business activities. The climb in office prices accelerated after consolidating in 2006.
purchase price of shopping and flatted factory space rose even higher by 20 and 29 per cent respectively.
The number of newly completed residential flats fell further to 10 500 units in 2007. Residential flat vacancy fell from 5.9 per cent at end-2006 to 4.9 per cent at end-2007 as a result of strong demand and limited new supply. Nevertheless the number of new private residential flats coming on the market over the next few years is expected to be 65 000, comprising unsold flats and flats on disposed sites where construction has yet to commence. This is more than three times the average number of flats take-up each year between 2003 and 2007.
As for non-residential properties, the amount of new space provided by them increased to 416 900 square metres in 2007. New office space was almost tripled to 320 000 square metres in 2007, with the new growth occurring mostly in Grade A premises in non-core districts. On the other hand, new retail space for the year shrank by over 70 per cent compared with the large supply in 2006. The vacancy rate for office space rose from 7.7 per cent in 2006 to 8.9 per cent in 2007 due largely to the threefold rise in supply. But the vacancy rates for shop space and space in flatted factories fell from 9.8 per cent and 7.2 per cent respectively at end-2006 to 8.1 per cent and 6.2 per cent at end-2007 due to strong demand for them.
In terms of property transactions, the number of sale and purchase agreements received for registration in the Land Registry rose by 47 per cent in 2007. Agreements for residential units received in 2007 jumped 50 per cent to a post-1997 high of