ENG-2005 — Page 92

62 The Economy

average annual primary sales of private residential flats during 2001-2005. Completions of non-residential properties in terms of internal floor area fell by 57 per cent to 161 400 square metres in 2005, with the decrease in office space outweighing increases in retail and industrial space. The sustained growth in demand prompted a drop in vacancy rates in all types of property in the private sector. By the end of the year, residential flats' vacancy rates had fallen to 6 per cent; office space, 8.7 per cent; shopping space, 10.3 per cent; flatted factory space, 7.3 per cent; and industrial-cum-office space, 9.8 per cent.

The number of property transactions, as measured by agreements for sale and purchase of property registered with the Land Registry, rose by 16 per cent in the first half of 2005 over a year earlier, but fell by the same amount in the second half as prices began to fall. The total number of property transactions thus remained virtually unchanged from the previous year. Yet in value terms, property transactions still rose by a substantial 12 per cent, a reflection of the property price increases from one year to the next. Transactions in residential property increased by 3 per cent in number and 13 per cent in value, with the increases occurring entirely in the secondary market. Nonresidential properties transactions fell by 11 per cent in number but rose by 10 per cent in value (Chart 15).

Chart 15

Sale and purchase agreements by broad type of property

Number ('000)

50

40

30

20

10

Residential property Non-residential property

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2001

2002 | 2003

2005

2004

Following a hectic start, the pace of sales slowed for both residential and non-residential properties in the second half of 2005.