in Hong Kong
After reading propagandist Rupert Murdoch's publication of Fantabulist v Collusionist on HK's "Free Market", there's little doubt about why Hong Kong is rapidly losing ground to even the backwaters of the PRC.
The measures used by the fantabulist and collusionist of a free market are no minimum wage for workers and low taxes on the wealthy, not ease of entrance by new players in to a market or extortion of monopoly rents by oligopolists or the stuff you're supposed to learn about in Econ classes. The fantabulist of course is from the dubious Lion Rock Institute: the guys who make the loons at the Heritage and Agitprop Enterprise Institute seem sane and mainstream.
If we are trying to fool ourselves into believing that it will be fine after we fend off speculators, then we are not looking into the real issue, which is the peg to the U.S. dollar. The best way to go is to let the Hong Kong dollar float.
Property prices in HK have skyrocketed due to speculation for two reasons. One is that house flipping is THE Hong Kong pastime, just watch TVB Jade or read the quick online news blurbs from the local papers, and the prospect of speculative mortgages underwater and tycoon profits shrinking are untenable. Given that negative valuations and shrinking tycoon profits are unacceptable to the government, there is only one way for prices to go: UP! So the second issue is that folks in the market with huge wads of cash from the mainland's cash giveaways (stimulus loan programs) know that investing in HK property is a sure thing. And the HK government has previously said they won't lift a finger to stop the flows of hot money from the mainland, even if it's an illegal flow, so HK property prices going down would hurt influential people on the mainland and that would be very bad for the political prospects of people in the HK government.
So what do you call this highly government managed and tycoon oligopoly property market? If you're a fantabulist, you call it highly competitive. If you're a collusionist, you call it money in the bank. If you're just an average Chao, you call it once again being screwed by government-tycoon collusion both here and on the mainland.