Chart 12
The Economy 59
Labour earnings
(a) Year-on-year rate of change
in money terms
(b) Year-on-year rate of change
in real terms
Per cent
7
6
5
4
3
2
1
0
Per cent
7
6
Service sectors
as a whole
5
4
3
Z
1
0
Service sectors
as a whole
-1
-1
-2
-2
-3
-3
-4
-4
Manufacturing sector
-5
Manufacturing sector
-5
-6
-6
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2001 | 2002 | 2003 | 2004 | 2005
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2001 | 2002 | 2003 | 2004 | 2005
Labour earnings began to bounce back from the start of 2005.
The Property Market
L
The property market continued to flourish alongside the continuing economic upturn in the first half of 2005, but turned much quieter especially in the residential property market as interest rate hikes accelerated in the second half. After being buoyant for more than a year, both sales activities and transacted prices. eased off from their earlier peaks. Yet as market fundamentals stayed positive, prices for different types of properties increased by varying degrees for 2005 as a whole. Meanwhile, the leasing market improved steadily across the board amid solid user demand.
In the home sales market, flat prices rose to a five-year high in the second quarter of 2005, sustaining the upward trend established in the latter part of 2003. Market sentiment continued to be underpinned by the sanguine economic outlook, improving employment situation, and low interest rate environment prevailing then. Yet acquisition interest cooled off subsequently as the rise in best lending rates by major banks accelerated, bringing a cumulative total of 2.75-3 percentage points for the whole year. Against this backdrop, flat prices declined during the second half of 2005, particularly prices for small and medium-sized flats. Nevertheless, overall flat
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