Hui, E C M and Ng, I (2009) Price discovery of property markets in Shenzhen and Hong Kong. Construction Management and Economics, 27(12), pp. 1175-1196. ISSN 1466433X
Abstract
Hong Kong and Shenzhen, while being interrelated in many aspects, have encountered different types of demand shocks throughout the past decade. This is likely due to disparities in market conditions and degrees of government regulations. In the light of such differences in property price trends, this research first investigates the relationships between housing prices and market fundamentals for both cities; and then it explores whether a housing price bubble existed for them in 2006. The results indicate that housing prices seem to have interacted abnormally with market fundamentals in recent years, especially for Shenzhen. In addition, while Shenzhen's housing prices are mainly explained by previous housing prices and personal income, most economic indicators explain Hong Kong's housing prices well. With regard to price bubbles, a puny bubble which amounts to as much as 4.5% of the housing price was formed in Shenzhen in 2006. In the meantime, the housing price bubble for Hong Kong had been diminished. Though currently not at dangerous levels, housing price bubbles should be taken with caution especially in today's China, characterized by overinvestment and rapid policy changes.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | generalized impulse response; granger causality; price; property market; variance decomposition |
| Index terms: | economic indicator, market condition, Hong Kong, disparity, China, income, property market, housing, variance, government regulation |
| Subjects: | health safety and environment, data analysis and analytics, real estate economics, economic and policy analysis, social justice, construction type, economic analysis, measurement and scaling, Geography |
| Topics: | Urban Studies, Business Strategy, Geographical Context, Ethics, Research Practice, Construction Technology, Health and Safety |
| Descriptive scope: | 3 PCA |
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