- Title Pages
- Dedication
- Illustrations
- Preface
- 1 Time to Count the Social Cost of Uniting a People Divided
- 2 Setting the Scene
- 3 Supply and Demand Factors in Housing
- 4 On the Nature of Public Sector Housing Policies in Hong Kong
- 5 Comparing Public Sector Housing Policies in Hong Kong and Singapore
- 6 Equal Yet Unequal
- 7 The Inequity of Small Housing Units
- 8 Small Housing Units and High Property Prices
- 9 On Public Housing Policy and Social Justice
- 10 Economic and Social Consequences of Public Housing Policies
- 11 Demand for Homeownership and the Housing Ladder
- 12 How to Warm Up the HOS Secondary Market
- 13 Divorce, Remarriage, and the Long-Term Housing Strategy
- 14 Divorce, Inequality, Poverty, and the Vanishing Middle Class
- 15 The Impact of Global Economic Forces on Housing in Hong Kong
- 16 The Linked Rate, Domestic Stability, and Dual Integration
- 17 Reasons for Keeping the Linked Rate
- 18 Why Speculation Is Not a Bad Thing
- 19 Speculators, Property Agents, and the Spreading of Risk in the Presale Housing Market
- 20 How the Application List System Became the Winner’s Curse
- 21 Is There a High Land-Price Policy in Hong Kong?
- 22 Lima’s Other Path, Tsoi Yuen Village, and the Northeast New Territories
- 23 Stranded between Singapore’s Way and Lima’s Other Path
- 24 Subsidized Housing and Stability
- 25 Diversity and Occasional Anarchy
- 26 Population, Poverty, and the Triumph of the City
- 27 Eighty Percent Homeownership (Part 1)
- 28 Eighty Percent Homeownership (Part 2)
- 29 Conclusions and Reflections
- Epilogue
Speculators, Property Agents, and the Spreading of Risk in the Presale Housing Market
Speculators, Property Agents, and the Spreading of Risk in the Presale Housing Market
- Chapter:
- (p.137) 19 Speculators, Property Agents, and the Spreading of Risk in the Presale Housing Market
- Source:
- Hong Kong Land for Hong Kong People
- Author(s):
Yue Chim Richard Wong
- Publisher:
- Hong Kong University Press
Housing forward contracts for presale units have two important distinguishing features. First, residential units are necessarily heterogeneous. Second, the final users are typically homeowners or small landlords and usually not the speculators. Speculators and property agents who trade in housing forwards perform these dual functions and therefore offer an incentive for developers to sell some of their presale units to them rather than to final users. Developers are also motivated to sell some of their units to speculators and property agents because they can sell units in a single development in a number of stages. Clearly, the price one is willing to bid for a unit depends to a large extent on its expected future value. This value will change over time as more information becomes available, which will alter the likely bid. A developer could try to pick the best time to sell units but can never be completely certain when that will be. An optimal strategy would be to space out sales over time to balance risk against expected return, but there is a limit to such sales, dictated by relevant cost-benefit considerations.
Keywords: Hong Kong, Housing, Housing policy, Public Housing, Politics, Social mobility, Population, Economics, Growth
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- Title Pages
- Dedication
- Illustrations
- Preface
- 1 Time to Count the Social Cost of Uniting a People Divided
- 2 Setting the Scene
- 3 Supply and Demand Factors in Housing
- 4 On the Nature of Public Sector Housing Policies in Hong Kong
- 5 Comparing Public Sector Housing Policies in Hong Kong and Singapore
- 6 Equal Yet Unequal
- 7 The Inequity of Small Housing Units
- 8 Small Housing Units and High Property Prices
- 9 On Public Housing Policy and Social Justice
- 10 Economic and Social Consequences of Public Housing Policies
- 11 Demand for Homeownership and the Housing Ladder
- 12 How to Warm Up the HOS Secondary Market
- 13 Divorce, Remarriage, and the Long-Term Housing Strategy
- 14 Divorce, Inequality, Poverty, and the Vanishing Middle Class
- 15 The Impact of Global Economic Forces on Housing in Hong Kong
- 16 The Linked Rate, Domestic Stability, and Dual Integration
- 17 Reasons for Keeping the Linked Rate
- 18 Why Speculation Is Not a Bad Thing
- 19 Speculators, Property Agents, and the Spreading of Risk in the Presale Housing Market
- 20 How the Application List System Became the Winner’s Curse
- 21 Is There a High Land-Price Policy in Hong Kong?
- 22 Lima’s Other Path, Tsoi Yuen Village, and the Northeast New Territories
- 23 Stranded between Singapore’s Way and Lima’s Other Path
- 24 Subsidized Housing and Stability
- 25 Diversity and Occasional Anarchy
- 26 Population, Poverty, and the Triumph of the City
- 27 Eighty Percent Homeownership (Part 1)
- 28 Eighty Percent Homeownership (Part 2)
- 29 Conclusions and Reflections
- Epilogue
