56 The Economy
Chart 12
Labour earnings
(a) Year-on-year rate of change
in money terms
Per cent
(b) Year-on-year rate of change
in real terms
Per cent
7
6
5
7
6
5
4
4
Financing,
3
3
insurance,
real estate and
2
2
business services
1
0
-1
-1
-2
-2
-3
Services sectors as a whole
-3
-4
T T
T
-4
Q1 Q3
Q1 Q3 Q1 Q3 Q1
Q3 Q1 Q3
2002 2003 | 2004 | 2005 | 2006
Financing, insurance,
real estate and
business services
Services
sectors as a whole
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
2002 | 2003 | 2004 | 2005 | 2006
Labour earnings continued to increase moderately in money terms during 2006.
The Property Market
The home sales market went through a healthy consolidation in 2006, adjusting further to the hectic situation which prevailed from mid-2003 to mid-2005. Flat prices moved within a narrow margin in 2006, as prospective buyers became more prudent after the earlier price surge. The uncertain interest rate outlook was also a restraining factor, which diminished following the pause in US interest rate rises since August. Nevertheless, market sentiment remained generally positive, as the longer- term outlook was well underpinned by the sanguine economic outlook and the improving employment situation. In December 2006, flat prices edged up by 4 per cent over a year earlier. Compared with the trough in 2003, flat prices in December 2006 were 61 per cent higher, but still 46 per cent off the peak in 1997. As regards leasing, flat rentals increased further during 2006, albeit at a steadier pace of 6 per cent. The leasing performance was supported by the progressive improvement in user demand alongside the economic upturn (Chart 13).
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