What do we know about Housing Supply? The case of Hong Kong

The house price in Hong Kong is well-known to be "unaffordable." This paper relates the macroeconomy and the housing market of Hong Kong and argues that the housing supply plays a vital role in explaining the phenomenon. This paper also shows that there are some practical challenges in understanding the housing supply of Hong Kong, including the potentially complicated ownership structure of real estate development. While the discussion centers on the situation of Hong Kong, its lesson may also apply to the housing markets in other small open economies.