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The Property Market
5. Although as already mentioned building continued at a near record level, the property market remained depressed throughout the year. Among the causes of this were the difficulty of borrowing from banks on real estate, a large number of sales by mortgagees (see paragraph 59), the existence of a large number of empty flats and other units, and the shaken confidence of speculative investors, who used to buy flats more or less as gambling counters in the hope of a quick resale at an enhanced price. These factors resulted in a buyers' market, in which buyers had to be wooed with cut prices and/or extended terms of payment. In the latter respect the Government-sponsored Hong Kong Building and Loan Agency Ltd was able to assist many purchasers by lending on 12-year mortgages at 9%. In a further effort to stimulate home ownership, the Agency in May 1966 increased the amount it would lend on flats costing not more than $20,000 to 80% of appraised value, and its maximum loan from $40,000 to $50,000 on flats valued at up to $75,000. That buyers could be found if the price and terms of payment were right is proved by the number of assignments of units registered in the Land Office, which rose to the new record figure of 20,162. In fact, in spite of all the new buildings completed, the number of flats vacant in January 1967 when the Commissioner of Rating and Valuation made a survey of the situation, was down by 2,230 or some 12% from 18,519 to 16,389 since his previous survey in March 1966. There was also a big improvement in the average period premises were empty following the issue of an occupation permit, this falling from 5.64 months at the previous survey to 3.24 months. The Survey also revealed a trend towards the building of more flats in the lower price ranges.
6. While the market for new flats was therefore not unsatisfactory at lower price levels, that for new land both for industrial and other purposes was very depressed. In fact, the number of agreements for the sale or grant of Crown land was at 137 the lowest for over ten years, there being only 21 sales by auction, 49 private treaty grants and 25 regrants of lots previously held on 75 year leases. This lack of activity was also reflected in there being fewer applications for extensions and exchanges, and also in the extremely small total of twenty-five Exclusion Orders made under the Landlord and Tenant Ordinance, which meant both fewer new projects and fewer tenants to be rehoused.
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