In Hu Ke’s blog, we could see that London has replaced Hong Kong become the most expensive city now. People are less capable to afford costly houses. Many of them choose to rent property or even move out of London.

It says there are two possible solutions, and the first one is that building more houses. I don’t think that is a efficient solution neither, as a glut of houses for sale along with foreclosures, tight credit and weak demand have kept the housing market on the ropes, then the economy structure can easily collapse as Ke said in her blog. On the other hand, decreasing sale of houses also harms the economy. Estate developers have more leverage and a better shot at getting an offer close to their asking price, which results in housing shortage for most of people and the price becomes higher.

The second solution is that firms are encouraged work with banks to offer their employees better mortgage credit service. I agree with this solution but I am not sure if it’s can solve it. After all, both banks and companies need to evaluate if individuals have rights to mortgage. I do not think many people would be benefited form this.

However, it is reliable that the government intervene the housing market? I don’t think so. It is a super complex economy system, so even the government needs to be very careful about that and have everything under control. Unfortunately, I haven’t got a good idea for government on solving this problem. What governments can do is just try to make the price increases slowly like “house purchase quota policy”to cool prices.

High housing price becomes a global topic nowadays; so many things stimulate the price that goes crazily high. For now, I think we’d best wait and see what happens next.

Attached link:

Hu Ke’s blog

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