International Articles

The Impact of Supply of Subsidized Sale Flats on Private Housing Prices in Hong Kong

Authors:
Eddie Chi-man Hui
Tak-yun Wong

Start Page: 253
End Page: 280
Volume: 15
Issue Number: 2
Year: 2007
Publication: Journal of Real Estate Literature

Abstract: This paper investigates the impact of supply of subsidized sale flats on private housing
prices in Hong Kong, and their cause-and-effect relationships. Using quarterly data for 1978–2003, the results show that private property prices move independently of the supply of subsidized sale flats and that such supply does not ‘‘Granger cause’’ private housing prices. The study also found evidence that the cessation has not restored the market or resulted in any increase in housing prices. The demand or prices in the private sector is not influenced by the implementation of the moratorium nor does the production and sale of subsidized sale flats pose a direct threat to the
private sector in Hong Kong. Finally, the regression analysis shows that the stock of private domestic accommodation, transaction volume of private residential flats, household income, and unemployment rate are important in explaining property market behavior.