Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Ricardo Fernholz

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@2024 LokPing Fong


This paper examines the impact of macroeconomic factors and the COVID-19 pandemic on residential property prices in Hong Kong. To address these two elements, a two-tier approach was used. In the first regression model, monthly changes in the natural log of residential property prices regressed on relevant macroeconomic variables such as the HIBOR rate, the unemployment rate, the effective exchange rate, the Hang Seng Index, and the M2 money supply. The regression results confirmed that the effective exchange rate and HIBOR rate were important macroeconomic factors that impacted the growth of residential property prices. In the second regression model, dummy variables for 2020, 2021, 2022, and 2023 were also included to capture how residential property prices changed during the COVID-19 pandemic while controlling for the same macroeconomic variables. The effective exchange rate and the HIBOR rate remained statistically significant. However, the magnitude of the coefficients decreased slightly, suggesting that the year dummy variables captured some of the variance in residential property prices. Moreover, I found that 2020, 2021, and 2022 are associated with a decrease in the growth of residential property prices. A deep dive into potential omitted variables that the dummy variables might capture reveals that the Hong Kong population decreased in 2020 and 2021 for the first time in over a decade. Also, Hong Kong’s tourism sector suffered greatly from aggressive COVID-19 travel restrictions between 2020, 2021, and 2022. Therefore, a plausible story is that the year dummy variables captured the negative effects of a population decrease and a depressed tourism sector on the growth of residential property prices.

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