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Property bubble in Hong Kong: A predicted decade-long slump (2016-2025)

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  • Peter Richmond
  • Bertrand M. Roehner

Abstract

Between 2003 and 2015 the prices of apartments in Hong Kong (adjusted for inflation) increased by a factor of 3.8. This is much higher than in the United States prior to the so-called subprime crisis of 2007. The analysis of this speculative episode confirms the mechanism and regularities already highlighted by the present authors in similar episodes in other countries. Based on these regularities, it is possible to predict the price trajectory over the time interval 2016-2025. It suggests that, unless appropriate relief is provided by the mainland, Hong Kong will experience a decade-long slump. Possible implications for its relations with Beijing are discussed at the end of the paper.

Suggested Citation

  • Peter Richmond & Bertrand M. Roehner, 2016. "Property bubble in Hong Kong: A predicted decade-long slump (2016-2025)," Papers 1608.03985, arXiv.org.
    • Handle: RePEc:arx:papers:1608.03985
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    References listed on IDEAS

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    1. Roehner,Bertrand M., 2002. "Patterns of Speculation," Cambridge Books, Cambridge University Press, number 9780521802635, January.
    2. Richmond, Peter, 2007. "A roof over your head; house price peaks in the UK and Ireland," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 375(1), pages 281-287.
    3. Bertrand M. Roehner, 2009. "Hidden Collective Factors in Speculative Trading," Springer Books, Springer, number 978-3-642-03048-2, June.
    4. Sergei Maslov & Bertrand M. Roehner, 2003. "Does The Price Multiplier Effect Also Hold For Stocks?," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 14(10), pages 1439-1451.
    5. Muhammad Al-Jasser & Muhammad Ahmed Banafe, 2005. "Foreign exchange intervention in Saudi Arabia," BIS Papers chapters, in: Bank for International Settlements (ed.), Foreign exchange market intervention in emerging markets: motives, techniques and implications, volume 24, pages 265-72, Bank for International Settlements.
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