11.

Based on a 20-year mortgage requiring monthly payments at prime rate minus 2.5%, and 30% down payment for a 40 square meters apartment in Hong Kong, the year in which average home ownership was least affordable is:

Year	Median Household Income per month (HK$)	Price per sq. meter. (HK$)	Prime Rate (%)
20x1	16,000	36,050	7.5
20x2	17,000	38,910	7.5
20x3	17,500	43,184	7.5
20x4	18,000	58,655	7.5
20x5	17,500	55,000	7.5

Select one:

a. 20x1

b. 20x4

c. 20x5

d. 20x3

e. 20x2

12.

Which of the following statements regarding the use of pre-sale market by real estate developer is/are correct?

I. The smaller the difference between the spot and the expected future price, the more units the developer will pre-sell in the pre-sale market.

II. The more risk averse the developer is, the less units the developer will sell at the end of the construction period.

III. The greater the price uncertainty, the more units the developer will sell at the end of the construction period.

Select one:

a. II only

b. I only

c. I and II only

d. II and III only

e. III only

13.

Which of the following factors are used for tracking the development of property market bubble in Hong Kong after the outbreak of the global financial crisis in 2008?

I) Real property prices

II) Real new mortgages

III) Confirmor transactions

IV) Real GDP growth

Select one:

a. I, II and III

b. I and III

c. I and II

d. I, II, III and IV

e. I, III, and IV

14.

According to the FOUR-quadrant framework for property and capital market, everything else the same, which of the following statements is/are correct.

I) An increase in demand for space will lead to an increase in rents, property price, construction, and the stock of space.

II) An increase in construction costs decreases construction levels, which in turn decreases the stock of space, driving rents and assets prices.

III) An increase in market interest rate will lead to an increase in the stock of space and a decrease in rent level.

Select one:

a. III only

b. I, II and III

c. I only

d. II only

e. I and II only

15.

Suppose the office market is initially at equilibrium. Everything else the same, which of the followings will likely be caused by a one-time drastic increase in the cost of land?

I) a decrease in office rent level

II) an increase in the supply of office space

III) an increase in the market value of office space

Select one:

a. I and II only

b. I, II and III

c. II only

d. III only

e. I only