3
The Economy
Property Market
The residential property market remained buoyant in the first half of 2018, but underwent a consolidation in the second half. While the tight demand-supply balance of flats continued to render support, market sentiment was dampened by various uncertainties, including the Mainland-US trade tensions, continued US interest rate hikes and subsequent increase in local Best Lending Rates in September, and volatility in the global stock markets. Trading activities quietened down in the second half, while flat prices registered a decline from August.
Trading activities were buoyant in the first half of 2018 before turning very quiet in the second half. For the year as a whole, the total number of sale and purchase agreements for residential property received by the Land Registry fell 7 per cent to 57,200, far below the long-term average of 82,600 from 1998 to 2017 (chart 10). Total consideration edged up 1 per cent to $559.3 billion.
Chart 10
Number ('000)
30
20
10
0
Sale and Purchase Agreements by
Broad Type of Property
Non-residential property Residential property
Q1 Q2 Q3 Q4|01|Q2 Q3 Q4|Q1|02|03|04|01|02|03|04|01|Q2 Q3 Q4
2014
2015
2016
2017
2018
Trading activities were buoyant in the first half of 2018 before turning very quiet in the second half.
Flat prices in December on average retreated 9 per cent from the peak in July. Nevertheless, an increase of 2 per cent was recorded for the whole year, mainly reflecting hefty gains in the first half of the year. Analysed by size, prices of small and medium-sized flats rose 2 per cent during 2018, while prices of large flats edged down 1 per cent. The leasing market likewise showed signs of cooling off towards the year end. With the gains in the first three quarters partially offset by the decline in the fourth quarter, flat rentals on average rose a modest 3 per cent between December 2017 and December 2018. Rentals of small and medium-sized flats and large flats both rose 3 per cent (chart 11).
45