3
The Economy
months when the HKMA's macro-prudential measures dented market sentiment. Total consideration soared 30 per cent to $556 billion in parallel.
Chart 11
Number ('000)
30
Sale and Purchase Agreements by
Broad Type of Property
Non-residential property
■Residential property
20
10
|01|02|03|Q4|01|02|03|04|01|02|03|04|01|02|03|04|01|02|03|04
0
2013
2014
2015
2016
2017
Trading turned active again in the latter part of 2017.
Overall flat prices recorded a hefty gain of 15 per cent between December 2016 and December 2017. While the rate of increase decelerated somewhat around the middle of the year, it accelerated again towards the year end along with a revival in transactions. Analysed by size, prices of small and medium-sized flats and large flats went up 15 per cent and 12 per cent respectively. Overall flat rentals also picked up to register an increase of 8 per cent between December 2016 and December 2017 amid the favourable economic environment. Rentals of small and medium-sized flats and large flats increased 8 per cent and 4 per cent respectively (chart 12).
As a result of the surge over the past several years, overall flat prices in December 2017 exceeded the 1997 peak by 104 per cent. Home purchase affordability' stayed elevated at about 67 per cent in the fourth quarter, significantly above the long-term average of 45 per cent over 1997-20162. Should interest rates rise three percentage points to a more normal level, the ratio would soar to 87 per cent.
While the demand-supply balance of flats remained tight for the time being as indicated by the vacancy rate, it is set to ease in the years ahead. The vacancy rate edged down from 3.8 per cent at end-2016 to 3.7 per cent at end-2017. Nonetheless, reflecting the government's sustained efforts in land supply, the total supply of flats in the coming three to four years comprising
1 The ratio of mortgage payment for a 45 square metre flat to median income of households, excluding those living in
public housing.
2
The historical data on home purchase affordability has been revised to reflect the revision to income statistics in the General Household Survey.
46