Comparing two financial crises: the case of Hong Kong real estate markets

LEUNG, K. Y. Charles and TANG, C. H. Edward (2011): Comparing two financial crises: the case of Hong Kong real estate markets.

Abstract

Hong Kong is no stranger to bubbles or crisis. During the Asian Financial Crisis(AFC), the Hong Kong housing price index drops more than 50% in less than a year. The same market then experiences the Internet Bubble, the SARS attack, and recently the Global Financial Crisis (GFC). This paper attempts to provide some “stylized facts” of the real estate markets and the macroeconomy, and follow the event-study methodology to examine whether the markets behave differently in the AFC and GFC, and discuss the possible linkage to the change in government policies (“learning effect”) and the flow of Chinese consumers and investors to Hong Kong (“China factor”).

• Item Type: MPRA Paper
• Language: English
• Keywords: regime switching, structural change, small open economy, bounded rationality, banking policy
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R20 - General; G - Financial Economics > G0 - General > G01 - Financial Crises; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General

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