Bloomberg recently had an interesting article (London and Hong Kong Facing Housing Bubble Risk, UBS Says) which ranked Hong Kong as the second most overvalued city in terms of property prices. Housing prices are up 60 percent since 2010 and UBS asserts that it is at the most risk of a housing bubble (along with London).

It is interesting to note that the Hong Kong market serves as a playground for Chinese demand. There are three reasons for this. Firstly, taxes in Hong Kong are lower for luxury and consumer goods. Secondly, quality control in Hong Kong is stricter with little food safety lapses – baby formula, anyone? Lastly, the Hong Kong market is a medium for Mainland Chinese citizens to transfer money (both dirty and clean) out of China. Bloomberg’s China’s Money Exodus profiled the many ways Mainland Chinese citizens use to circumvent China’s capital controls on ...