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Identify the Factors That Influence the Demand for Housing in a Country of Your Choice and Examine the Impact of a Housing Boom on the Economy of Your Chosen Country.

In: Business and Management

Submitted By liovyue
Words 1305
Pages 6
Hong Kong is a financial center with low taxation and enjoys free trade from all around the world. However, there are a plenty of people who cannot own or even rent an apartment because of the high housing prices. According to the Hong Kong Audit
Commission(2014), there are 22.8 million peoples who are in a waiting list of public rental housing and most of them are from lowincome families, singletons, elderly and unemployed people. Most of them are living in urban slums known as "cage home" because they cannot afford the payment of rent or buy house. Therefore, It is demonstrated that the housing boom of Hong Kong not only had the positive impact, but negative. This essay will describe two of the factors influence the demand for housing in Hong Kong, including lowinterest rate and intensive population, as well as analyze the benefits and disadvantages impact of the housing boom.
"A runup in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future"(Investopedia, 2014). The meaning of the housing boom is that housing prices continue to increase, because of the consumer would like to make a profits through sale of real estate.
Hong Kong has a very lowinterest rate compared to other neighboring countries such as
China, India and Korea. According to the Trading Economics(2014), the benchmark interest rate in Hong Kong was last recorded at 0.50 percent compared with other countries 6 percent, 8 percent and 2.25 percent respectively. It demonstrated that Hong
Kong provided a lowinterest rate platform to attract people who are interested in investing in the stock market and Real estate. Moreover, the more willing people are to borrowing, as well as spending money to make big purchases such as houses or cars, when consumers pay less interest, They can have a choice to spend more money...

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