Hong Kong is one of the most exciting tourist havens in the world. Each part and streets in this country has its own unique atmosphere, nature, and fashion. Parallel to world's any sophisticated city, Hong Kong was considered great destination making their visitors and citizens here have a great experience.
Certainly, Hong Kong proffers its residents a stimulating, vibrant, and multi-ethnic lifestyle. Though, buying a property or real estate in Hong Kong is not somewhat easy considering of its high record prices. In Hong Kong, the property was divided into different categories i.e. residential market, commercial market, and industrial market.
Basically, residential real estate in Hong Kong was considered as the most worthwhile as well as the expensive in the world. Varying upon the necessities of investors, an array of residential property selections are accessible in Hong Kong, like penthouses, apartments, villas, flats or even single-detached homes. There are also particular kinds of residential properties, chiefly designed for older citizens, suchHousing for Senior Citizens and autonomous flats constructed by the Hong Kong Housing Authority.
In Hong Kong, people invest in residential real estate because of numerous reasons. Actually, one of their reason is they use it in order to rent it out. From the records, a residential property in Hong Kong can obtain a least of HK$ 100,000 per year. Though, a residential property can get profits only if the property is situated in the city's classy areas with easy convenience to nearly all services and attractions in the area. If a residential property is attained to vend it after some times, then go for a property placed in such areas that have strapping latent for development.
An immense advantage of investing in residential real estate it serves as an outstanding long term investments, yielding attractive profits. In view of the fact that Hong Kong's property value is continuously increasing, investors can sell it at a price 20-50% higher than the sum for which it was purchased. Similarly, investing in residential property is a great way to earn safe income by renting out.
Apparently, the Commercial Real Estate is one of promising sector in the property market of Hong Kong. Because of its excellent legal as well as banking systems, many overseas business firms have made Hong Kong as their extending headquarters. This created significant impact to the demand for Hong Kong's commercial real estate such as office spaces, shopping malls, and retail stores. And since the number of foreign investors is deciding to invest in Hong Kong, the demand for the said property was continuously increasing. Meaning, the commercial real estate in Hong Kong has now turned out to be a demand-driven circumstances. Basically, in previous years, there are substantial evidences that prices of commercial properties have increased. In addition, the rents charged on commercial real estate are remarkably high which is ranging from HK$22 to HK$105/ft.2 per month.
As recorded in the report of Ho, (2003), the property market in Hong Kong had experienced an economic crash. In the record, the unemployment and underemployment rate were on a high end on the industry because of the outbreak of a disease. Nevertheless, the president of the Hong Kong Association of Property Management Companies stated in an issue of the industry’s newsletter that there is still a room for growth in the industry (Ho, 2003). The president further stated that service skills of front-line staffs should be further upgraded. This task is basically included in the duties that a project manager should perform. The researcher believes that such task can be performed well through proper understanding of property management services, the enactment of new legislation relating to mandatory property maintenance and management, as well as the privatization of public housing management in Hong Kong.
In accordance to the discussion, this paper aims to assessthe Market Failure Problem in Hong Kong Private Residential Property Market. In addition, the discussion regarding environmental issues of the market failure problem in Hong Kong Private Residential Property Market will be presented. Furthermore, this study aims to evaluate the cost and benefit of Hong Kong Private Residential Property Market actions concerning industry development and progress. Specifically, the researcher will try to answer the following queries:
1. What are the emerging problems present in the private residential property market in Hong Kong?
2. What is the main reason that leads Market Failure Problem in Hong Kong Private Residential Property Market?
Theoretical Background
With respect to the progress and development of the property market condition of Hong Kong, assessment of their current economy tends to be a crucial task. Actually, the apparent existence of market failure is when use of goods and ser