Speculate a lot

Abstract

While the residential and commercial property markets in Hong Kong are extensively discussed, little attention is paid to the carpark market. This work contributes to fill the research gap in three ways. First, it provides a simple empirical model to explain carpark ratios in residential buildings. Second, it hand collects transaction‐level data and constructs a price index for the carpark market in Hong Kong. Third, it shows that changes in stamp duties increase the volatility in the carpark market. This research may shed light on the current debate on the effectiveness of the stamp duty in stabilizing the real estate market.

A robust textual analysis of the dynamics of Hong Kong property market

“…In addition, almost one‐third of the Hong Kong Government revenue depends on the property market performance (e.g., stamp duties and land premiums). Although many studies have examined Hong Kong’s real estate market because of its salient features and importance to the economy (e.g., Huang et al, 2018; Kwan et al, 2015; Leung & Tse, 2017; Leung et al, 2020b; Tan, 2019), most of these studies did not discuss the sentiments channel in detail 1 . Given the importance of the real estate sector in Hong Kong, understanding the sentiments channel of the housing market is a key matter for macro‐financial stability.…”

“…In fact, the notion of market sentiments is not novel. Kindleberger (1978), Galbraith (1990), Tetlock (2007), and Shiller (2009) have argued that market sentiments are one of the key determinants of asset prices, including housing prices. However, the unobservable and elusive nature of market sentiments makes systematic studies of how they influence the housing market difficult.…”

“…Huang et al (2018) propose a search‐theoretic model to explain the Hong Kong housing market’s price–rent ratio and turnover rate. Leung and Tse (2017), Leung et al (2020b) and Tang (2021) stress the speculation in the real estate markets.…”