Article:

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

Author: Charles Ka Yui Leung, Edward Chi Ho Tang

Start Page: 383
End Page: 428
Volume: 18
Issue Number: 3
Year: 2015
Publication: International Real Estate Review

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, by improving housing availability and thereby increasing housing supply elasticity, this could effectively decrease housing price volatility.

Keywords

Land Policies, Housing Availability, Housing Affordability, Housing Volatility, Granger Causality