Hong Kong Property Market Analysis

The popularity of property investment among Hong Kong people motivates us to do a research on this topic. In this study we try to understand the behavior of Hong Kong property market by analyzing the historical data. First, we use the method of ANVOA to analyze real estate return. By one-factor ANOVA analysis, we found that the mean return (value appreciation) is roughly the same in different location or for house of different size, which is a bit contrary to our common intuition. By two-way ANOVA analysis, we found that different district favor different flat size. Small flats in Hong Kong Island and Kowloon achieve best property yield and new territory medium flats achieve best property yield. Second, based on the variable Rental and Price, Workforce Variables, Interest Rate, HSI and Gold, CPI, GDP and Export we had collected, we tried to interpret the property market in Hong Kong and build a regression model for CCI. We looked at the relation between CCI and every variable we had, and finally we found that only Hang Seng Index maintained a very constant and reasonable relation with CCI. So we fixed a CCI model with Hang Seng Index as independent variable. And we found that the prediction power of this model is quite good.