02152cas a2200265 a 4500 AALejournalIMF011421 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463925949 1018-5941 BD-DhAAL BD-DhAAL Craig, R. Determinants of Property Prices in Hong Kong SAR : Implications for Policy / R. Craig, Changchun Hua. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (15 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper uses an econometric model of residential property prices in Hong Kong SAR to assess the effectiveness of alternative policies in slowing the increase in property prices. The rapid rise in property prices is well explained by macroconomic fundamentals; real GDP per capital, real domestic credit, construction costs, land supply, and the real interest rate. Policy can influence the property market though land supply and prudential and tax policy, with the latter policies taking the form of a stamp duty on property transactions and a tighter loan-to-value ratio (LTV) on lending. Land supply is the most effective policy insturment for restraining property price increases but it operates with a significant lag. The LTV and stamp duty dampen speculative activity that drives up property prices. While these policies can slow the increase in the short run, they should be guided by their long run objectives of financial stability and counteracting speculation. Mode of access: Internet Hong Kong Special Administrative Region, People's Republic of China imf Hua, Changchun. IMF Working Papers; Working Paper ; No. 2011/277 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/277/001.2011.issue-277-en.xml IMF e-Library