Property, Credit and Business Cycles in Hong Kong

Rita Yi Man Li ()
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Rita Yi Man Li: Hong Kong Shue Yan University

Chapter Chapter 5 in Law, Economics and Finance of the Real Estate Market, 2014, pp 71-83 from Springer

Abstract: Abstract Hong Kong is a tiny area, but it houses over 7 million people. The scarce land resources and the relatively high demand for housing together push up the prices of residential units in Hong Kong. For many years, the money spent on housing represented a relatively high proportion of annual household expenditures. The upswing or the decline in residential prices affects many of us. Because the economic environment in Hong Kong affects people’s purchasing power and the willingness to spend on housing, this chapter firstly reviews the housing market, credit cycles and the macroeconomic situation in Hong Kong, followed by a Hodrick-Prescott Filter analysis of the business and residential pricing cycles in Hong Kong. Lastly, a Pearson’s correlation analysis is used to display the relationship between the prices for several types of housing and economic cycles. The results show that the business cycles have a closer relationship with the larger size units than with the smaller size units. Secondly, there is a closer relationship between the housing cycles for class A to C units (smaller size units) than for class D and E units (larger size units).

Keywords: Hp filter; Housing market; Hong Kong (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-3-642-54245-9_5

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DOI: 10.1007/978-3-642-54245-9_5

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