CHAN Ming Ko
Analysis of Housing Market in Hong Kong
In Hong Kong, housing served citizens and foreign for both residential and investment purposes. It also provides investment opportunities for speculation and wealth accumulation to local residents and investors and attracts capital influx into HK's economy. According to (Leung, 2005), these housing activities amounted to about 22% of GDP in Year 2002, making property industry became the second largest industry in Hong Kong. Moreover, the business activities related to housing market has contributed the government a stable source of income on substantial revenue through land sale, government rates and rent, stamp duty and other related tax income. The substantial revenue help government keep necessary public services in operations and provision of new public goods to satisfy increasing needs from the society such as the low-rental public housing, medical services, provision of additional infrastructure to enhance connectivity of New Towns in the New Territory. This can maintain Hong Kong as a world-class and prosperous city. Thus housing market always plays an important role in the future development of Hong Kong. In the following section, analysis would be emphasis on the housing market in Hong Kong through examine the opportunity cost for developer to do investment, factors affecting the demand and supply of housing, the externalities generated and identify the sources of inefficiency and inequity resulted. 1. Housing Scarcity in Hong Kong Housing is a very scared resource in Hong Kong due to limited land suitable for development, tight restrictions on town planning, lease control and building design and termination of Government Home Ownership Scheme (HOS) in 2002. On the supply side, developer tends to plan their development carefully and employ professional surveyors to carry out...