Housing Markets and the Global Financial Crisis
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Housing Markets and the Global Financial Crisis

The Uneven Impact on Households

Edited by Ray Forrest and Ngai-Ming Yip

Housing markets are at the centre of the recent global financial turmoil. In this well-researched study, a multidisciplinary group of leading analysts explores the impact of the crisis within, and between, countries.
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Chapter 13: Business Nearly as Usual: The Global Financial Crisis and its Impacts on Households in Hong Kong

Ngai-Ming Yip


Ngai-Ming Yip INTRODUCTION The most recent economic crisis is perhaps the deepest recession since the 1929 world depression. The stock market reacted even more bleakly than the 1929 depression with a 50 per cent fall from April 2008 to early 2009 compared with only a 10 per cent fall 80 years ago. Although rescue packages of various countries have prevented panic and the market has recovered sharply in early 2009, the stock market in mid-2009 had still fallen 30 per cent below its peak in April 2008. At the same time the collapse in demand had reduced the volume of world trade by 20 per cent in June 2009, 15 months after its peak in April 2008. In the 1929 depression, it only fell by 10 per cent over the same time span (Eichengreen and O’Rourke, 2009). With an open and globalized economy, Hong Kong has inevitably been hit severely by the recent crisis. From mid-2008, all economic indicators reacted negatively – GDP plummeted, trade nosedived, house prices dropped and the stock market collapsed. Yet from early 2009, the shoots of recovery began to emerge, first in the property market then in consumer confidence, the stock market and the economy, although there is little evidence of a quick recovery in imports and exports. It also seems that Hong Kong has not suffered much in the global credit crunch and its resulting devastating economic chaos or the collapse of housing markets found in some Western countries. Of course, Hong Kong is not...

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