XN000022-1983-04-28 — Page 12

THURSDAY, APRIL 28, 1983

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THE PRICE INDEX, WHICH EXCLUDES NEW TERRITORIES PROPERTIES, FELL BY JUST OVER 25 PER CENT DURING THE YEAR. THE EQUIVALENT RENTAL INDEX FELL BY ABOUT 20 PER CENT.

CONCLUSION: 1982 CLEARLY WAS NOT A GOOD YEAR FOR THE PROPERTY MARKET, THOUGH AS HONG KONG ENTERED 1983 THERE WERE SOME SIGNS OF MORE STABLE TIMES AHEAD. THIS WAS PARTICULARLY SO FOR SMALLER DOMESTIC UNITS. IT CONTINUES TO BE SELF-EVIDENT THAT THERE IS A CONTINUING DEMAND FOR SUCH UNITS AT AN AFFORDABLE PRICE.

IN CONTRAST, THE OUTLOOK FOR SALES OF LARGER FLATS IS LESS GOOD. THE RECORD SUPPLY FORECAST FOR 1983 SEEMS LIKELY TO EXERT FURTHER DOWNWARD PRESSURE ON BOTH PRICES AND RENTS.

THE INCREASE IN TAKE-UP IN BOTH THE COMMERCIAL AND OFFICE SECTORS WAS AN ENCOURAGING SIGN, AND INDICATES THAT LOWER PRICES AND RENTALS HAVE HELPED TO STIMULATE DEMAND. NEVERTHELESS IN RESPECT OF OFFICES AT LEAST, A RECORD SUPPLY IS FORECAST FOR 1983, WHICH, AS WITH LARGER FLATS, IS LIKELY TO HAVE A DAMPENING EFFECT ON PRICES AND RENTS.

FOR FLATTED FACTORIES DECLINING TAKE-UP RATHER THAN RECORD SUPPLY LEVELS HAS CAUSED THE BUILD-UP IN VACANCIES. THE SUPPLY NOW FORECAST FOR 1983 IS DOWN BY ALMOST 60 PER CENT ON PREVIOUS EXPECTATIONS. GIVEN AN UPTURN IN HONG KONG'S MAIN EXPORT MARKETS, TAKE-UP SEEMS LIKELY TO INCREASE.

THE LARGE STOCK OF VACANT ACCOMMODATION IN ALL SECTORS WILL CONTINUE TO FAVOUR END-USERS AND SHOULD PROVIDE A DISINCENTIVE TO SPECULATORS LOOKING FOR QUICK TRADING PROFITS, SUCH STOCKS, PARTICULARLY IN THE INDUSTRIAL SECTOR, PLACE HONG KONG IN A FAVOURABLE POSITION TO TAKE ADVANTAGE OF ANY UPTURN IN THE WORLD ECONOMY. HOWEVER, THEY WOULD ALSO SEEM TO PRECLUDE AN EARLY RECOVERY OF THE MARKET.

THE ABILITY OF END-USERS TO TRADE UP IN TERMS OF QUALITY, QUANTITY AND LOCATION SEEMS LIKELY TO BE A FACTOR IN THE COMING YEAR. IN THIS REGARD, HONG KONG'S TRADERS AND ENTREPRENEURS EXHIBIT AN ENVIABLE MOBILITY.

CLEARLY, TOO, PRICES HAVE FALLEN MORE THAN RENTALS WITH THE RESULT THAT INITIAL YIELDS NOW LOOK MORE ATTRACTIVE VIS-A-VIS ALTERNATIVE FORMS OF INVESTMENT.

NOTE TO EDITORS 1

IF FURTHER INFORMATION OR COMMENTS ARE REQUIRED, PLEASE CONTACT EITHER THE ASSISTANT COMMISSIONER (VALUATION) MESSRS HỤI MAN-SHING (CHINESE MEDIA) ON 5-7957604, OR THE TECHNICAL SECRETARY, MIKE WILLIAMS (ENGLISH MEDIA) ON 5-7957613, IN FIRST INSTANCE. FURTHER FACTUAL INFORMATION CAN ALSO BE OBTAINED FROM MESSRS YEUNG CHE-KEUNG ON 5-7957629 OR STEVE WILCOX ON 5-7957614.

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