Availability, Affordability and Volatility: The Case of Hong Kong Housing Market

75 Pages Posted: 16 Nov 2014

See all articles by Charles K. Leung

Charles K. Leung

City University of Hong Kong

Edward Chi Ho Tang

Hong Kong Shue Yan University

Date Written: September 14, 2014

Abstract

Housing prices in Hong Kong have gained international attention. This study suggests that the housing supply may be insufficient. Consistent with previous studies, we confirm that merely increasing the land supply may not increase the housing supply. We also find preliminary evidence for widening income inequality, which, when combined with unavailability, can lead to unaffordability in the housing market. Given the current housing supply elasticity with respect to price, Hong Kong is not more volatile than major cities in the United States. Thus, improving housing availability and thereby increasing housing supply elasticity, could effectively decrease housing price volatility.

Keywords: Land policies, housing availability, housing affordability, housing volatility, Granger causality

JEL Classification: E30, R21, R31, R52

Suggested Citation

Leung, Charles Ka Yui and Tang, Edward Chi Ho, Availability, Affordability and Volatility: The Case of Hong Kong Housing Market (September 14, 2014). Available at SSRN: https://ssrn.com/abstract=2524685 or http://dx.doi.org/10.2139/ssrn.2524685

Charles Ka Yui Leung (Contact Author)

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Edward Chi Ho Tang

Hong Kong Shue Yan University ( email )

10 Wai Tsui Crescent
Braemar Hill Road
North Point
Hong Kong

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