Developer sentiment, developer’s strategy and housing supply: evidence from Hong Kong

Ziyou Wang, Eddie Chi-man Hui and Cong Liang

Regional Studies, 2025, vol. 59, issue 1, 2377675

Abstract: The increasingly important role of sentiment in the housing market has complicated the challenges facing developers during boom-and-bust cycles. This study investigates how developer sentiment affects developers’ decision-making and the housing supply at the project level. As the standard evaluation usually overlooks sentiment resulting in suboptimal inferences, we develop a new theoretical model that analyses both sentiment and developers’ optimal strategies. Our findings suggest a ‘U’-shape relationship between developer sentiment and the expected waiting time to develop. Second, the optimal development density declines when developer sentiment intensifies. The Hong Kong housing market is used as a case for empirical analysis.

Date: 2025
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DOI: 10.1080/00343404.2024.2377675

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