Essays on real estate markets and macro-economy


Student thesis: Doctoral Thesis

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  • Chi Ho TANG

Related Research Unit(s)


Awarding Institution
Award date2 Oct 2013


The thesis consists of three chapters. The first chapter attempts to compare the Hong Kong real estate market performance under the two financial crises, namely, Asian Financial Crisis (AFC) and Global Financial Crisis (GFC). By using the event-study methodology with aggregate data, we find that it behaved differently under these two crises. Typically, the shocks from AFC are severe and long-lasting, but the shocks from GFC are smaller and died out in a short period of time. We proposed that it may due to the learning process of the Government, at which they took some improvement measures, such as having certain of foreign reserves and establishing Hong Kong Mortgage Corporation, to minimize the shocks of another crisis. It may also due to "China factor", where having a closer relationship with China enhances the economic growth of Hong Kong. The second chapter studies how commodity price movements have affected the local house prices in Australia and New Zealand, which are heavily dependent on commodity exports, by building a simple and geographically hierarchical empirical model. We find that both direct and indirect impacts are important. Regional heterogeneity and differential responses to energy versus non-energy commodity price movements are highlighted. Robustness check and discussion for future research are also provided. The third chapter argues that durability and tangibility of housing attributes facilitate "social comparison" and such motive is actually priced in the market. With a large and rich dataset of apartment unit transactions in Hong Kong, this paper shows that other things being equal, (1) even though the roof area has limited usage, the value of one square foot of roof is around 30 - 70% of the value of one square foot of flat's gross area; (2) a 10% increase in the "relative height" of an apartment within the same building would cost about 4 - 7% more; (3) the effects of "relative size" are insignificant. Some recommendations will be provided.

    Research areas

  • Financial crises, Prices, Economic aspects, Real property, Hong Kong, China, Real estate business, Australia, New Zealand