3
The Economy
Completion of private residential flats was at a modest 10,100 units in 2012, though it was already 7 per cent higher than in 2011. Completion net of demolition, at 7,600 units, was similar to a take-up of 7,600 units. As a result, the vacancy rate stayed at a low 4.3 per cent at the end of 2012, the same as a year earlier. Completions are forecast to increase by 34 per cent to 13,600 units in 2013. In the coming three to four years, the total supply of flats (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 62,000 units as estimated at the end of 2011 to 67,000 units as estimated at the end of 2012, the highest since September 2007.
The non-residential property markets were generally buoyant in 2012. Underpinned by vibrant inbound tourism and ongoing strength in the local consumption market, prices of retail shop space in the fourth quarter of 2012 surged by 38 per cent over a year earlier, and rentals also rose by 13 per cent (Chart 16).
Chart 16
Prices and Rentals of Retail Shop Space
(1999=100)
Index
520
480
440
400
360
Price index
320
280
240
200
160
120
80
Rental index
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
2008
2009
2010
2011
Prices and rentals of retail shop space surged further.
2012
For office space, overall prices in the fourth quarter of 2012 surged by 21 per cent over a year earlier. Prices of Grade A, B and C office space rose by 14 per cent, 23 per cent and 26 per cent respectively. Office rentals in the fourth quarter rose by 7 per cent over a year earlier, with Grade A, B and C office space registering gains of 7 per cent, 9 per cent and 9 per cent respectively. Meanwhile, prices and rentals of flatted factory space rose further by 41 per cent and 12 per cent respectively (Chart 17).
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