TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 274

5.6

Demand

FC040/1616

for

residential property continued to be

Several large-scale

the

fairly weak in the first half.

developments undertook marketing exercises and there was some renewed interest in buying residential property, although this was mainly confined to small flats in convenient locations

priced at around or below $400,000 each. The decline in prices and the attractive sales terms, such as mortgages up to 100% of the sales price, offered by some developers have apparently stimulated sales. Although

increases in the

mortgage rate, to 13% in April 1983 and

dampened some of the potential demand for small flats, the precise impact is not yet clear, especially as the mortgage

rate was reduced again in July. The market for large residential flats, however, remained depressed. Rescheduling

and modification of building programmes and requests for

permission to reduce the size of flats are particularly evident for this class of property.

5.7

to 15% in May,

In the first half of 1983, prices and rentals of residential property declined further, although prices and rentals of prime property in convenient locations may

may have stabilized towards the end of the period.

5.8

The additional supply of commercial property(6), in terms of usable floor area completed, increased by 33% in the first half of 1983 compared with the first half of 1982. The amount of vacant commercial premises, representing 11.5% of the stock of shops and 16.9% of the stock of offices at the

end of 1982, was substantial. The relatively slow growth in consumer demand in the first half of this year did not provide

/much

...

(6) Commercial property is defined to include offices, shops and miscellaneous commercial premises such as upper floor restaurants.

46