IDEAS home Printed from https://ideas.repec.org/a/vls/finstu/v18y2014i4p63-104.html
   My bibliography  Save this article

The Imminent Housing Collapse - Will History Repeat Itself?

Author

Listed:
  • LAI, Ping-fu (Brian)

    (Division of Business and Management, United International College, Beijing Normal University Hong Kong Baptist University)

  • CHAN, Ho Sum

    (ABRS International Consultancy)

Abstract

Human being is not particularly good at learning from history. Either we haven't lived long enough to live through every moment of it, or we just forget what we have lived through. Today, many analysts' cranky critiques are still very bullish, and are trying hard to explain intuitively why Hong Kong property prices can't drop, and how much healthier the market is. However, a remarkably stagnant property market in terms of transaction volume, even though prices are still holding up for the time being, is far more sceptical about markets' inherent rationality. There is very little doubt that home prices are among the most expensive on earth; Demographic trend is working against the market; Economic uncertainties of U.S fiscal cliff increase; Mainland China slowdown curbs Hong Kong growth; Interest rates on the only way up; Government's moves to check speculation and the Illusion of supply shortage etc. This is the prerequisite to call anything a "bubble", and the property market in certainly meets these criteria. The purpose of this paper is to use an econometric model and descriptive statistical analysis to illustrate Hong Kong resident property prices correction is imminent today.

Suggested Citation

  • LAI, Ping-fu (Brian) & CHAN, Ho Sum, 2014. "The Imminent Housing Collapse - Will History Repeat Itself?," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 18(4), pages 63-104.
  • Handle: RePEc:vls:finstu:v:18:y:2014:i:4:p:63-104
    as

    Download full text from publisher

    File URL: ftp://www.ipe.ro/RePEc/vls/vls_pdf/vol18i4p63-104.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Yener Altunbas & Leonardo Gambacorta & David Marques-Ibanez, 2014. "Does Monetary Policy Affect Bank Risk?," International Journal of Central Banking, International Journal of Central Banking, vol. 10(1), pages 95-136, March.
    2. Christian Hott & Terhi Jokipii, 2012. "Housing Bubbles and Interest Rates," Working Papers 2012-07, Swiss National Bank.
    3. Matteo Ciccarelli & Angela Maddaloni & Jose Luis Peydro, 2015. "Trusting the Bankers: A New Look at the Credit Channel of Monetary Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 979-1002, October.
    4. Harding, John P. & Rosenthal, Stuart S. & Sirmans, C.F., 2007. "Depreciation of housing capital, maintenance, and house price inflation: Estimates from a repeat sales model," Journal of Urban Economics, Elsevier, vol. 61(2), pages 193-217, March.
    5. Giovanni Dell'Ariccia & Pau Rabanal & Christopher W. Crowe & Deniz O Igan, 2011. "Policies for Macrofinancial Stability; Options to Deal with Real Estate Booms," IMF Staff Discussion Notes 11/02, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Housing; Property; Bubble; Resident; Hong Kong;

    JEL classification:

    • F3 - International Economics - - International Finance

    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:vls:finstu:v:18:y:2014:i:4:p:63-104. 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: (Daniel Mateescu). General contact details of provider: http://edirc.repec.org/data/cfiarro.html .

    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.