ENG-2013 — Page 79

The Economy

interest rates rise by three percentage points to a more normal level, the ratio would soar to 71

per cent.

The non-residential property market has also cooled off since March 2013. The number of sale and purchase agreements for non-residential property dropped by 42 per cent to 19,800, and total consideration by 22 per cent to $157.3 billion.

Amid the slowing growth in retail sales, prices of retail shop space rose moderately by 3 per cent and rentals by 6 per cent between December 2012 and December 2013, with the monthly gains decelerating over the course of the year and reverting to small declines in the latter part of 2013 (Chart 16).

Chart 16

150

Index

140

130

120

110

Prices and Rentals of Retail Shop Space

(Jan 2012-100)

Price index

Feb 2013

Rental index

100

Jan Mar

May

Jul

1

2012

Sep Nov Jan Mar

|

May

Jul

Sep

Nov

2013

Prices and rentals of retail shop space moderated and reverted to small declines in late 2013.

For office space, overall prices rose by 9 per cent, yet most of the gain occurred during the first quarter. Prices of Grade A, B and C office space went up by 4 per cent, 11 per cent and 14 per cent respectively. Over the same period, overall office rentals rose by 7 per cent, with Grade A, B and C office space recording gains of 6 per cent, 8 per cent and 11 per cent respectively (Chart 17). Meanwhile, prices and rentals of flatted factory space both jumped by 10 per cent, yet the increase for rentals tapered towards the end of the year and that for prices even showed a moderate decline.

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