The performance of the Hang Seng Index and the property sector would seem to confirm this confidence. According to the survey, the increase in optimism was seen mainly in expected increases in new orders and net sales. Respondents revealed that improved performance has been generated by increased demand from both domestic and overseas orders . Although there is a moderate decrease compared with the previous quarter, due to seasonal factors in various industries, a surge in trade is expected with a prediction of 8.5 per cent growth in original exports and 10 per cent growth in re-exports. Confidence levels are expected to remain high during 1997.
Home prices continue to rise, particularly in the luxury market, where supply is very limited.
A slight increase in interest rates is unlikely to hurt market sentiment. Mortgage rates are not expected to rise significantly and banks are aggressively competing for home-financing business. Consumer spending is spreading outside the property market as well. Retail sales continue to rebound mostly in consumer durable goods. A healthy economy and growth in wages has boosted consumer spending.