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One of the reasons for such high housing costs is the influx of investment money. For example, this http://en.wikipedia.org/wiki/The_Beverly_Hills http://en.wik
by hoi 13y ago
One of the reasons for such high housing costs is the influx of investment money. For example, this http://en.wikipedia.org/wiki/The_Beverly_Hills http://en.wikipedia.org/wiki/The_Beverly_Hills apartment complex is mostly empty. Most of the houses bought up by rich mainlanders looking to park their money somewhere that would still grow their investment.
Secondly, there are cheaper alternatives. Living in teh New Territories can be tremendously more cash efficient. I live in the hills in a house, 2 floors, 3 bedroom, with a garden, and pay less than $2500 USD per month.
- briandon 13y agoTotally correct. Now, if you told HN the net floor area of your $USD 2.5k-a-month village house and the dimensions of your 3 bedrooms, you'd probably shock many posters here.
- ddeck 13y agoCorrect. What few realize though is that the archaic pegged exchange rate is the key contributor to this. In a typical exchange regime, such an influx of capital would push the exchange rate higher and provide a balancing effect. Instead, you get asset price inflation while wages in local currency remain flat. This makes the rich richer and the poor poorer. [1] Compounding the effect is the inability to have any kind of independent monetary policy since the rate is pegged and there are no currency controls. Consider an economy with strong growth, 6% inflation, and interest rates on home mortgages of .....~1%? Welcome to HK. [1] http://www.businessweek.com/news/2012-06-18/hong-kong-s-wealth-gap-widens-amid-aging-population-inflation http://www.businessweek.com/news/2012-06-18/hong-kong-s-weal...