Property still on the slide
THE Government's downward revision of Hong Kong's economic growth figures has weakened already weak sentiment in the territory's property markets.
According to Vigers Property Market Review Third Quarter 1995, the Government's announcement that GDP growth for this year would be five per cent, rather than the 5.5 per cent as previously predicted, had resulted in a drop-off in buying interest.
In addition, unemployment was rising and the Hang Seng index remained below the levels it had reached in 1993 and 1994.
Sales prices and rents had fallen across the board during July, August and September, the report said. They had dropped between five and 10 per cent over this period, bringing them in line with 1993 levels.
In the residential market, there had been strong sales activity during the third quarter but prices were much lower than those achieved last year, the report said.
Leasing activity had remained fairly strong for well-located apartments in the $20,000-to-$40,000-a-month range but a lack of demand for upmarket properties had led to a softening of rents.
On the whole, landlords had been responding to the depressed market by becoming more willing to negotiate, the report said.
Prices for industrial space also had fallen because the economic slowdown had reduced demand for factory premises, it said. Redevelopment plans for a number of I/O (industrial/office) buildings had been put on hold.
In the retail sector, the absence of shoppers had depressed sales and leasing activity as store owners waited until their cash registers began to ring again, before expanding operations.
With little sign of a turnaround, the report predicted that market conditions would remain unchanged across all property sectors in the last three months of this year.