ENG-2008 — Page 97

The Economy | 57

districts. On the other hand, the vacancy rate for shopping space rose from 8.1 per cent at end-2007 to 8.7 per cent at end-2008, attributable partly to the dwindling demand. Similarly, the market for flatted factory space also suffered a setback in the latter part of 2008. As take-up moved into negative territory for the year, the vacancy rate for flatted factory space rebounded from 6.2 per cent at end-2007 to 6.5 per cent at end-2008.

Transaction volume began to fall in the second quarter of 2008, and plunged sharply further in the third and fourth quarters. For the year as a whole, the number of sale and purchase agreements for residential property received by the Land Registry fell by 22 per cent to 95 931. Total consideration of these agreements fell by a similar extent of 21 per cent to $343.8 billion. Likewise, the number of sale and purchase agreements for non-residential property in 2008 dropped 21 per cent to 17 367 while their total consideration declined 24 per cent to $69.3 billion (Chart 15).

Chart 15

Sale and Purchase Agreements by Broad Type of Property

Number ('000)

50

Residential property

Non-residential property

40

30

20

10

0

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

2004

2005

2006

2007

2008

Against the deteriorating economic backdrop, transactions contracted substantially in 2008, especially during the second half.

Price Movements

Inflation was a global concern during most of 2008. The surges in food and energy prices, as well as the tightening capacity constraints arising from strong economic growth in the past several years, had driven inflation in many economies to the highest seen in the last decade. As a small open economy, price pressures in Hong Kong generally followed the global trend. The Composite Consumer Price Index (Composite CPI) increased by 4.3 per cent in 2008, markedly faster than the 2 per cent recorded in both 2006 and 2007.