XN000022-1995-01-25 — Page 61

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Answer:

Mr President,

(a)

(b)

(c)

The statements referred to in this question were made spontaneously in response to oral questions from the media. They were not therefore intended to be precisely analytical but were based on my interpretation at the time of various information, including past property price movements, supply indications, the activities of sellers and signs of continuing consumer resistance to prices being asked. They were also made against the background of signs that, on the one hand, over pessimistic statements were being made about the property market, while, on the other, others were seeking to 'talk the market up'. In other words, the statements were intended to strike a balance among other views being publicly expressed.

.

Property purchasing power and affordability vary considerably from household to household and are constantly changing. They are a function of many factors, such as the income and circumstances of the individual household, aspirations as to type and price of property, interest rates, banks' lending policies, etc. General trends are, however, discernable.

The Rating and Valuation Department compiles price and rental indices for various classes of property as a general guide to price and rental movements. These are derived by analysing actual sales prices and rents. Property price movements, however, are determined by market forces depending on demand and supply. The Government's wish is to see that the consumer or potential purchaser has as much information on price movements and supply as possible so that, with or without expert advice, he can make a considered choice. Government statistics and statements are clearly only two among many sources of guidance which can be drawn upon.

End/Wednesday, January 25, 1995