IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v42y2012i3p396-406.html
   My bibliography  Save this article

Economic restructuring, urban growth, and short-term trading: The spatial dynamics of the Hong Kong housing market, 1992–2008

Author

Listed:
  • Monkkonen, Paavo
  • Wong, Kelvin
  • Begley, Jaclene

Abstract

The response of housing prices to changes in the geography of the economy and population within cities is empirically understudied. This paper examines the spatial dynamics of the Hong Kong housing market between 1992 and 2008, a time period that includes two periods of strong price appreciation and one market crash. Neighborhood housing price indexes are calculated for 96 census-defined areas, and patterns of appreciation during periods of boom and bust are analyzed with spatial autoregressive models. Empirical results show a difference between factors associated with housing price appreciation during the boom of the 1990s and the boom in the 2000s, reflecting changes in Hong Kong's economic and spatial structure at the end of the 20th century. Housing prices in centrally located neighborhoods increased by a much greater share after the city de-industrialized, despite massive investments in the city's transportation infrastructure. A proxy for speculative investment, short-term trading, is not found to be a statistically significant determinant of price changes at the neighborhood level during periods of appreciation.

Suggested Citation

  • Monkkonen, Paavo & Wong, Kelvin & Begley, Jaclene, 2012. "Economic restructuring, urban growth, and short-term trading: The spatial dynamics of the Hong Kong housing market, 1992–2008," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 396-406.
  • Handle: RePEc:eee:regeco:v:42:y:2012:i:3:p:396-406
    DOI: 10.1016/j.regsciurbeco.2011.11.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166046211001347
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Karl E. Case & Robert J. Shiller, 1994. "A decade of boom and bust in the prices of single-family homes: Boston and Los Angeles, 1983 to 1993," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 40-51.
    2. Case, Karl E. & Mayer, Christopher J., 1996. "Housing price dynamics within a metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 387-407, June.
    3. S. Wong & C. Yiu & M. Tse & K. Chau, 2006. "Do the Forward Sales of Real Estate Stabilize Spot Prices?," The Journal of Real Estate Finance and Economics, Springer, vol. 32(3), pages 289-304, May.
    4. Guerrieri, Veronica & Hartley, Daniel & Hurst, Erik, 2013. "Endogenous gentrification and housing price dynamics," Journal of Public Economics, Elsevier, vol. 100(C), pages 45-60.
    5. Albert Saiz, 2010. "The Geographic Determinants of Housing Supply," The Quarterly Journal of Economics, Oxford University Press, vol. 125(3), pages 1253-1296.
    6. Chan, Hing Lin & Lee, Shu Kam & Woo, Kai Yin, 2001. "Detecting rational bubbles in the residential housing markets of Hong Kong," Economic Modelling, Elsevier, vol. 18(1), pages 61-73, January.
    7. Irani Arraiz & David M. Drukker & Harry H. Kelejian & Ingmar R. Prucha, 2010. "A Spatial Cliff-Ord-Type Model With Heteroskedastic Innovations: Small And Large Sample Results," Journal of Regional Science, Wiley Blackwell, vol. 50(2), pages 592-614.
    8. Barton A. Smith & William P. Tesarek, 1991. "House Prices and Regional Real Estate Cycles: Market Adjustments in Houston," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 396-416.
    9. McMillen, Daniel P., 2008. "Changes in the distribution of house prices over time: Structural characteristics, neighborhood, or coefficients?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 573-589, November.
    10. Brueckner, Jan K. & Thisse, Jacques-Francois & Zenou, Yves, 1999. "Why is central Paris rich and downtown Detroit poor?: An amenity-based theory," European Economic Review, Elsevier, vol. 43(1), pages 91-107, January.
    11. Christopher J. Mayer, 1993. "Taxes, income distribution, and the real estate cycle: why all houses do not appreciate at the same rate," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 39-50.
    12. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    13. Roehner, Bertrand M., 1999. "Spatial analysis of real estate price bubbles: Paris, 1984-1993," Regional Science and Urban Economics, Elsevier, vol. 29(1), pages 73-88, January.
    14. Alan E. Gelfand & Mark D. Ecker & John R. Knight & C. F. Sirmans, 2004. "The Dynamics of Location in Home Price," The Journal of Real Estate Finance and Economics, Springer, vol. 29(2), pages 149-166, September.
    15. Daniel P. McMillen, 2003. "Neighborhood house price indexes in Chicago: a Fourier repeat sales approach," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 57-73, January.
    16. Basu, Sabyasachi & Thibodeau, Thomas G, 1998. "Analysis of Spatial Autocorrelation in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 61-85, July.
    17. Christian A. L. Hilber & Christopher J. Mayer, "undated". "Land Supply, House Price Capitalization, and Local Spending on Schools," Zell/Lurie Center Working Papers 392, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
    18. David M. Drukker & Ingmar Prucha & Rafal Raciborski, 2013. "A command for estimating spatial-autoregressive models with spatial-autoregressive disturbances and additional endogenous variables," Stata Journal, StataCorp LP, vol. 13(2), pages 287-301, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Monkkonen, Paavo & Zhang, Xiaohu, 2014. "Innovative measurement of spatial segregation: Comparative evidence from Hong Kong and San Francisco," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 99-111.
    2. repec:kap:itaxpf:v:25:y:2018:i:1:d:10.1007_s10797-017-9449-0 is not listed on IDEAS

    More about this item

    Keywords

    Housing markets; Price indexes; Spatial econometrics; China; Hong Kong;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:42:y:2012:i:3:p:396-406. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/regec .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.