TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 231

1.6

In the property sector, the vacancy position for most types of property was high in relation to the existing stock. Demand for property remained depressed in

depressed in the first half of 1983, with the exception of small flats in convenient

locations (paragraph 5.6). Prices and rentals of finished property in general eased further compared with the end of

1982 (paragraph 6.9). Total completions were more than in the

first half of last year (paragraph 5.4). Reflecting the building intentions of developers, the number of building plans with consent to commence work was substantially lower in

the first half of 1983 than in the same period last year (paragraph 5.10), even though building costs showed no

increase (paragraph 5.14).

1.7

Compared with the first half of 1982, the total area

of land sold by the Government in the first half of this year

increased by 25%, made up of a decrease of 72% for industrial

land and an increase of 64% for non-industrial land (paragraph 5.15). Despite the lack of a reliable overall measure, it seems that the price of land declined further, although there

were signs that, by mid year, prices of industrial land had

begun to stabilise (paragraph 6.5).

Inflation and the monetary aggregates

1.8

The rate of inflation, in terms of the Consumer

Price Index (A), increased slightly, from a year-on-year rate of increase of 9% in the first quarter of 1983 to 10% in the second quarter (paragraph 6.1). This largely reflects the

sharp depreciation of the Hong Kong dollar in the second half

of 1982, as its effects on import prices gradually worked through to the retail level. Other factors were rather more

favourable. For example, aggregate demand in the economy was not imposing much pressure the general price level, the growth rate of the money supply was slowing down during the

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