Apply the experiences in Hong Kong, to study the effectives of fiscal policy and monetary policy to achieve an adequate housing market

Abstract

Up to 2014, the housing affordability rating of this island reaches 17 and top in a survey covering 378 regions globally. The rating reveals the private housing market in Hong Kong is problematic and distance from achievement of an adequate housing market. Surprisingly, the local government has been performing a major role in the housing market since mid of 20th century. Given the continuous manipulation to the domestic market by the local government, why is the market still denounced twisted? In the paper, different government policies and measurements are examined for its effectiveness on the price of the private residential market. This research aims to investigate and compare the effectiveness between the fiscal and monetary policy applied by the Hong Kong Government on the housing market. In order to achieve an objective and clear analysis, quantitative approach is adopted in this attempt of research. Multiple regression model is built and macro-economic data is input to the model to examination the correlation. The remaining part of this study tries to analyze and explain the result in the model.