"The Anatomy of a Housing Bubble"

Grace Wong Bucchianeri, Wharton

Abstract

This paper investigates the existence of housing bubbles through a within-city, panel analysis. The Hong Kong housing market experienced a real increase of over fifty percent between 1995 and 1997. Two phenomena during the price upswing stand out: a substantial cross-sectional variation in the price increase and strong co-movements of return and turnover rates. I posit and present evidence for two causes of the bubble: newspaper coverage and political uncertainties.