published_or_final_version / abstract / Economics and Finance / Master / Master of Philosophy

published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

by Tse Tin-leung, Raymond. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1993. / Includes bibliographical references (leaves 84-85). / ABSTRACT --- p.ii / TABLE OF CONTENTS --- p.iii / LIST OF ILLUSTRATIONS --- p.v / CHAPTERS / Chapter I. --- INTRODUCTION --- p.1 / Scope of This Project --- p.1 / Chapter II. --- METHODOLOGY --- p.4 / Chapter III. --- THE SYSTEM OF LAND & PROPERTY SUPPLY IN HONG KONG --- p.5 / Supply by Hong Kong Government --- p.5 / Supply by Private Sectors --- p.5 / Chapter VI. --- BUYING & SELLING ： THE DECISION MAKING PROCESS --- p.7 / Buying Properties --- p.7 / Selling Properties --- p.9 / Chapter V. --- FACTORS AFFECTING THE PRICE MOVEMENT --- p.11 / The Price Movement --- p.11 / Factors Affecting Price Movement --- p.11 / Chapter VI. --- THE FINDINGS --- p.18 / Chapter VII. --- APPLYING PRICE EQUATION TO WHAMPOA GARDEN --- p.21 / Choice of District --- p.21 / The Data Collection for Whampoa Garden --- p.22 / The Findings --- p.23 / Chapter VIII. --- CONCLUSION --- p.25 / Chapter IX. --- LIMITATION --- p.27 / APPENDIX --- p.28 / BIBLIOGRAPHY --- p.84

published_or_final_version / Housing Management / Master / Master of Housing Management

published_or_final_version / Housing Management / Master / Master of Housing Management

published_or_final_version / Housing Management / Master / Master of Housing Management

The rapid restructuring of Hong Kong's economy as a result of China's economic reform and open door policy since the late 70s, has led to major shifts in the demand and supply of industrial buildings. These shifts resulted in misallocation of land resources due to various institutional constraints. The land use policies in Hong Kong have been changing since the late 80s in response to such misallocation. This study investigates the impact of these policies on prices and rental yields of industrial properties in Hong Kong. In addition, the impact of economic restructuring on the determinants of industry propel1y prices is also examined. The open door policy has attracted many industrialists to move their production base across the border to take advantage of the low land and labour costs leaving their industrial buildings in Hong Kong underutilized. Due to statutory zoning and restrictions in the land leases, redeveloping these industrial buildings for other uses is difficult and costly due to multiple ownership and high modification premium. However lease enforcement actions on industrial buildings are difficult and ineffective. The owners of industrial buildings will weigh the costs against the benefits of non-conforming use and decide whether they will leave their industry properties underutilized, use them for non-conforming uses, apply for change of use and pay associated fees / premiums or proceed with a combination of all these. The empirical results in this study suggest that the benefits outweigh the costs of non-conforming uses of industrial buildings, in particular for office uses. This is evidenced by the fact that industrial property prices were affected not only by the demand for spaces for industrial production but also by other demand drivers not related to the industrial productions in Hong Kong. These demand drivers included volume of re-export and service sector employment. These are demand drivers given the term Non-Industrial-Production Demand Drivers (NIPDD) in this study. Service sector employment is an office demand driver and that office use in industrial buildings is usually the highest valued non-conforming use, therefore the correlation between service sector and industrial property prices is an indicator of the intensity of non-conforming uses. Since the late 80’s, various changes in government policies toward industrial land use have been implemented with the aim to rectify land resource misallocation. These policy changes can be classified into (1) Planning Control Relaxation: changes that involve relaxation of planning control on redevelopment or conversion of existing industrial properties to other uses, which may involve rezoning of some industrial areas and (2) Use Restriction Change: changes that permit more types of uses in existing industrial properties with or without paying a premium or fee. The empirical results in this study suggest that, other things being equal, Planning Control Relaxation has a positive impact on industrial property prices while Use Restriction Change have strengthened or weakened the impact of service sector employment on industrial property prices depending on the nature of the policy change. In addition, empirical analysis also showed that only the Planning Control Relaxation could reduce the rental yield of industrial property by reducing the risk premium. The effect of Use Restriction Change on risk premium and therefore rental yield was not significant. Last year (2010), the government introduced the Revitalization of Industrial Buildings Policy, which further removed restrictions on the use of industrial buildings for production purposes. It will take time to accumulate sufficient data to show the impact of this major policy on industrial property prices and rental yields. / published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

Land and housing markets are separated, with the traders in the land market being developers and those in the housing market being end-users for self-occupation and investors for investment. The two markets, however, are closely related because demand for residential sites is derived from demand for housing. With this close relationship, any signals from the land market should be impounded to the housing market. Land auction, which is the most commonly adopted land disposal method in Hong Kong, is a significant event in the land market. The land auction events should contain market signals affecting trading decisions of homebuyers and sellers in the housing market in a similar way that corporate earnings announcements of a listed company affect the trading of its shares in the stock market. 　　This study investigates how land auctions affect trading volume in the secondary housing market in Hong Kong. Hypotheses are developed based on previous studies on the impacts of corporate earnings announcements on trading volume in stock markets with modifications to take into account the differences between housing and stock markets. The characteristics of housing market that are important in formulating the hypotheses are high transaction cost and market incompleteness (e.g. absence of short selling). In addition, lumpiness and indivisibility of housing, which make market participants risk-averse, also play important roles in the development of the hypotheses in this study. 　　The research results indicate that greater dispersion in prior beliefs before the land auctions is associated with lower trading volume in the housing spot market. Unexpected land auction outcomes, be they positive or negative, are also negatively related to trading volume in the housing market, with the negative outcomes exerting a strong downward pressure on trading volume. These findings are contradictory to the findings commonly found in most finance literature about trading volume around corporate earnings announcements which assumes negligible transaction cost but consistent with findings in Barron and Karpoff (2004). The deviation from previous studies of stock market can be explained by the risk-averse behaviour of market participants, high transaction cost and market incompleteness in the housing market. Although empirical data in Hong Kong are used, the implications are general and should be applicable to other housing markets with similar characteristics. This study also sheds light on how increase in transaction cost and restriction on short selling may affect trading volume around corporate earnings announcements in the stock market. / published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

In Hong Kong, housing prices have increased significantly in recent years. Amongst all the reasons for such significant increase, low interest rate has been recognized as one of the major reasons. Many studies have provided empirical evidence to support the negative relationship between interest rate and housing prices. However, in the US, recent studies (Glaeser, Gottlieb and Gyourko, 2010; Kuttner, 2012) show that the observed effect of interest rate changes on housing prices is much less than that predicted by the standard user cost model. According to the Glaeser et al. (2010), there are three potential explanations for the low housing price sensitivity to interest rate fluctuation. First, increase in land (and therefore housing) supply elasticity can reduce the effects of the demand-side variables, including interest rate. Second, high risk premium for long term mortgage rate in the US makes housing prices less sensitive to changes in interest rates. Third, the long-term mortgage contracts in the US cannot reflect the impact of frequent short term interest rate fluctuation. Among these three potential hypotheses proposed to explain the lower than expected housing price sensitivity to interest rate changes, land supply elasticity is more relevant to Hong Kong. By focusing on Hong Kong’s housing market, this thesis examines the relationship between land supply elasticity and the sensitivity of housing prices towards interest rate changes. When demand shift due to interest rate change, land supply (and therefore housing supply) may respond accordingly to reduce the impact of interest rate change. The more elastic the supply is, the weaker the housing price sensitivity to interest rate may be. Alternatively, housing prices are more sensitive to interest rate change when land supply is inelastic. To be more precisely, this study provides an empirical test on whether land supply elasticity reduces housing price sensitivity towards interest changes. Two approaches are applied to provide clear pictures of housing price sensitivity. First, data from different housing subsectors with different land supply elasticity are used for the empirical tests. The results show that prices of large units in the Hong Kong Island are significantly more sensitive to interest rate change, compared to those of small units in the New Territories. This is consistent with the implication of our hypothesis because new land for building luxurious units in Hong Kong Island is limited while there are relatively more lands available in the New Territories for smaller mass residential units. Second, in Hong Kong, all new land supply comes from the government in the form of leasehold land. Hence, government’s land supply policy has a major impact on land supply elasticity. For example, there was a period of restricted land supply before the handover in 1997, which effectively reduced land supply elasticity. On the other hand, the Application List land sales system adopted by the Hong Kong government from 2000 to 2013 should increase the flexibility in land supply. Therefore, this study makes use of these policy changes as nature experiments to investigate the effect of land supply elasticity on housing price sensitivity towards interest fluctuation. The results show that housing prices are more sensitive to interest rate change during the land supply restriction period and more insensitive when the Application List was used for land sales. / published_or_final_version / Real Estate and Construction / Doctoral / Doctor of Philosophy

published_or_final_version / Urban Design / Master / Master of Urban Design