IDEAS home Printed from https://ideas.repec.org/a/kap/jrefec/v10y1995i1p23-35.html
   My bibliography  Save this article

The Causal Relationships between Residential Property Prices and Rentals in Hong Kong: 1982-1991

Author

Listed:
  • Cheung, Yan-leung
  • Tsang, Shu-ki
  • Mak, Sui-choi

Abstract

This study examines the causal relationships between sale price changes and rental rate changes in the Hong Kong real estate market. Three different hypotheses are put forth: (1) the demands in the two markets are substitutes, (2) prices and rentals are positively correlated; and (3) prices and rentals are not correlated because of market segmentation. Using quarterly data of sale prices and rental rates for the five categories of residential property from four different districts, causal relationships are not found in 29 cases out of 40. For the other 11 cases, we find that price changes lead rental rate changes. The lag period is found to be one quarter, and this shows that the two markets are efficient: only one quarterly lag is necessary to establish causality where it exists. Copyright 1995 by Kluwer Academic Publishers

Suggested Citation

  • Cheung, Yan-leung & Tsang, Shu-ki & Mak, Sui-choi, 1995. "The Causal Relationships between Residential Property Prices and Rentals in Hong Kong: 1982-1991," The Journal of Real Estate Finance and Economics, Springer, vol. 10(1), pages 23-35, January.
    • Handle: RePEc:kap:jrefec:v:10:y:1995:i:1:p:23-35
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. I-Chun Tsai, 2021. "Price Rigidity and Vacancy Rates: The Framing Effect on Rental Housing Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 63(4), pages 547-564, November.
    2. Shu-Ki Tsang & Shu-Hung Tang, 1998. "The Impact of the China Factor on the pre-1997 Hong Kong Economy: a macroeconometric analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(1), pages 89-106.
    3. Honglin Wang & Chu Zhang & Weihang Dai, 2013. "Rental Adjustment and Housing Prices: Evidence from Hong Kong's Residential Property Market," Working Papers 012013, Hong Kong Institute for Monetary Research.
    4. Guangping Liu & Xiayuan Chang, 2021. "The Impact of Rising Housing Rent on Residents’ Consumption and Its Underlying Mechanism: Empirical Evidence from China," SAGE Open, , vol. 11(2), pages 21582440211, May.
    5. Kwok-Chiu Lam, 2016. "The Responsiveness of Hong Kong Private Residential Housing Prices," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 26-36.
    6. Mimi Liu & Jeremy Clark, 2017. "The effect of the price or rental cost of housing on family size: a theoretical analysis with reference to New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(3), pages 281-301, September.
    7. Chieh-hsuan Wang & Chien-ping Chung & Jen-Te Hwang, 2012. "Hedonic and GMM Estimates of the Relationship between House Prices and Rents in Taiwan," Economics Bulletin, AccessEcon, vol. 32(3), pages 2231-2245.
    8. Eddie Chi-man Hui & Xian Zheng, 2012. "The dynamic correlation and volatility of real estate price and rental: an application of MSV model," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2985-2995, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jrefec:v:10:y:1995:i:1:p:23-35. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.