TNAG-1762-FCO40-2516-Economic-situation-in-Hong-Kong-1988 — Page 55

CONFIDENTIAL #2

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Table 6

for which consent to commence work had been given,

increased by 11% in 1987 over the level in 1986

(Table 6). This growth was largely attributable to

an increase in building consents, by 7% in terms of

units or by 11% in terms of floor area, for

residential property. A sharp year-on-year increase in consents for this type of property

occurred in the third quarter. A decrease of 44%

in 1987 was, however, recorded in the consents for

commercial property, reflecting an adjustment by

the market to the substantial increase in building

starts in 1986, which will provide a large supply

of commercial floor space in the next two years.

Consents for this type of property fell to very low

levels in the second half of 1987. As regards industrial property, building consents in 1987 remained at roughly the same level as in 1986, with

the large increase in the second quarter offset by

decreases in the other three quarters.

20.

(e) Land disposal

A total of 24.8 hectares of land were

offered for sale at Government auctions and by

tender (including Letter A/B tenders) during 1987. Land sales in the latter part of 1987 were still quite well-received, and the prices fetched after the stock market crash were reasonably in line with

those obtained before the crash. This suggests that many developers, although more cautious, were still optimistic about the outlook of the property

market.

21.

The demand for sites in the two

Industrial Estates at Tai Po and Yuen Long was

sustained during 1987. 16 sites with a total area

POLICINCNTIAL * Z