ENG-2017 — Page 87

3

The Economy

unsold flats of completed projects, flats under construction but not yet sold and flats on disposed sites where construction can start any time stayed at a high level of 97,000 units as estimated at end-December.

Chart 12

Prices and Rentals of Residential Property

Index

160

150

140

130

120

110

100

Feb 2013

(Jan 2013-100)

Price index

Rental index

Nov 2016

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

2013

I

I

2014

2015

2016

2017 |

Flat prices recorded a hefty gain during 2017 while the increase in rentals accelerated.

The government has also put in significant efforts to manage demand and reduce possible risks to financial stability arising from an exuberant property market. These measures have yielded notable results.

The commercial and industrial property markets generally revived in 2017. For the year as a whole, the number of sale and purchase agreements for non-residential property rose 21 per cent to 22,200, and total consideration soared 62 per cent to $170.1 billion. Prices and rentals in individual market segments increased by varying degrees.

Sale prices of retail shop space rose 7 per cent between December 2016 and December 2017, while rentals went up 4 per cent (chart 13). For office space, overall prices gained 15 per cent. Prices of grade A, B and C office space went up 17 per cent, 12 per cent and 14 per cent respectively. Overall office rentals rose 5 per cent, with those of grade A, B and C office space recording a gain of 5 per cent, 3 per cent and 5 per cent respectively (chart 13). Prices and rentals of flatted factory space increased 13 per cent and 5 per cent respectively.

As to demand-supply balance, the vacancy rate of retail shop space stayed unchanged from a year earlier, at 9 per cent at end-2017, while those for office space and flatted factory space rose from 8.2 per cent and 5.8 per cent at end-2016 to 9.5 per cent and 6.1 per cent respectively at end-2017. Their respective long-term averages over 1997-2016 were 8.8 per cent, 9.8 per cent and 7.7 per cent.

47