The Subsidized Hong Kong Property Market: Public Utilities, Proximity Effects, Price Indices and Policy Impact

This paper presents a geospatial analysis of the government-subsidized, semi-commercial sector of the Hong Kong real estate market. Using a time dummy hedonic regression model, size, age, seasonal, floor-level, coastline-distance and commuting effects are investigated. Significant elevation gradient and new-station anticipatory effects are found for apartment proximity to the metro system. The paper also finds evidence of differentiated density spillover influences from various HKSAR housing sectors, positive for commercial housing and negative for the public rental unit market. In addition, a hedonic price index is constructed for the subsidized market. Two examples are included to demonstrate the index’s policy-side applications.