The Economy 1 65
The Government has always been mindful of the ramifications that wild fluctuations in property prices would have on overall macroeconomic and financial stability. To ensure the healthy and stable development of the property market, the Government has introduced a series of measures since early 2010, and stepped up its efforts throughout 2011. In order to sustain the momentum of supplying steady and sufficient land to the market, the Government successively announced the quarterly land sale programmes in April, June, September and December 2011. In June the Hong Kong Monetary Authority further tightened the mortgage lending standards. In October the Chief Executive announced in the 2011-12 Policy Address the resumption of the Home Ownership Scheme and enhancements to the My Home Purchase Plan. The various measures have achieved notable results in raising land supply, curbing speculative activities, preventing excessive growth of mortgage lending and increasing transparency of the property market.
Take-up of private residential property soared by 42 per cent over 2010 to 11 400 units in 2011, while completions remained low at 9 400 in 2011. As a result, the vacancy rate for private residential property came down from 4.7 per cent at end-2010 to 4.3 per cent at end-2011. In 2012, completions are forecast at 11 900 units, 26 per cent higher than in 2011. In the medium term, the total supply of flats in the coming few years (comprising unsold completed flats, flats already under construction but not yet sold and flats on disposed sites where construction has yet to commence) increased from 59 000 units as estimated at end-2010 to 62 000 units as estimated at end-2011.
Similarly, the non-residential property markets were buoyant in the first three quarters of 2011, but also eased in the latter part of the year. For office space, overall prices in December 2011 were 18 per cent higher than a year earlier. Within the total, prices of Grade A, B and C office space went up by 13 per cent, 21 per cent and 23 per cent respectively over a year earlier. Office rentals in December 2011 rose by 15 per cent over a year earlier, with Grade A, B and C office space registering gains of 17 per cent, 11 per cent and 11 per cent respectively. Nonetheless the uptrend in both office prices and rentals slowed towards the year- end, in tandem with heightened external uncertainties and the economic slowdown (Chart 16).
Underpinned by the buoyant local retail business, prices of retail shop space in December 2011 surged by 19 per cent over a year earlier, while rentals rose by 9 per cent. Meanwhile, prices and rentals of flatted factory space rose further by 24 per cent and 8 per cent respectively.
On transactions, the number of sale and purchase agreements for non-residential property fell by 10 per cent to 24 352 in 2011, though total consideration further increased by 13 per cent to $145.4 billion.