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Office market being closely monitored
Following is a question by Dr the Hon David Li Kwok-po and a written reply by the Secretary for Planning, Environment and Lands, Mr Tony Eason, in the Legislative Council today (Wednesday):
Question:
The "Review of the Office Market" prepared by the Planning, Environment and Lands Branch does not recommend any administrative measures to stabilise office prices/rents in the short term. However, in the Government's June 1994 announcement, the Secretary for Planning, Environment and Lands, mentioned that, having implemented measures intended to cool residential prices, the commercial property market is now subject to the attention of the property task force. The Government has not stated categorically that their November 1994 announcement has superseded their June 1994 announcement and investors are left to wonder as to whether or not there would be Government intervention in the commercial property market. Moreover, Hong Kong office rentals are the highest compared with its major competitors in the Asia-Pacific Region, making Hong Kong the most expensive business centre in the Region. Although the supply will increase significantly after 1996, there is no indication that the rentals will drop significantly as the demand remains strong. Will the Government inform this Council, besides increased supply, what other short-term and medium-term measures will be implemented to monitor the commercial property market on one hand, and ease the pressure of rental increase on the other?
Answer:
In July 1994, a Working Group was established under the Task Force on Land Supply and Property Prices to review the commercial property market. The objectives of the review were to establish whether there was a problem and, if so, to recommend measures to ameliorate the situation. The Report on the Review of the Office Market, published in November 1994, concluded that there was no case for Government intervention in the office market, but there was a need to monitor the situation.
Since then, we have been monitoring the office market closely. A Report entitled "Updated Property Market Statistics for the Domestic and Office Sectors" is compiled monthly by the Rating and Valuation Department. In order to make the Report more comprehensive, we have recently included a rental index for selected office developments, a report on supply and a forecast of supply of office premises.