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Abstract: This study examines long-run
price cycles, inventory conditions, and policy transmission in Hong Kong’s private
residential market. It integrates annual private domestic price-index data
beginning in 1985 with official indicators of completions, take-up, stock, and
vacancy, and interprets the results through a regime-based institutional
framework. The descriptive evidence indicates marked cyclical variation: a
strong pre-1997 upswing, a severe post-Asian financial crisis correction, a
low-interest-rate recovery, an extended period of macroprudential and
transaction-policy intervention, and a recent adjustment phase. A reduced-form
annual regression relates private domestic price growth to lagged vacancy and a
linear time trend. The estimated coefficient on lagged vacancy is negative (β =
−4.14), while the vacancy trend is negative to housing prices and statistically
significant in the long run. The results should therefore be interpreted as
conditional associations rather than causal estimates. Updated official
evidence shows that private domestic completions fell from 24,260 units in 2024
to 18,450 in 2025, take-up increased to 19,370 units, and year-end vacancy
declined from 4.5% to 4.3% of stock. Forecast completions are 16,980 units in
2026 and 15,360 units in 2027. The findings imply that Hong Kong’s housing
policy challenge has shifted from addressing perceived structural scarcity
alone toward managing absorption, expectations, financial vulnerability, and
the timing of future supply. DOI: https://doi.org/10.51505/IJEBMR.2026.11017 |
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