Allan Shek, owner of a gold and jewelry store in Hong Kong (China), said he bought 5 taxis and licenses to use them last month.
The price of a taxi license increased to 7.66 million Hong Kong dollars (nearly 990,000 USD) in June, an increase of more than 80% over the past four years and the highest level since 2000, according to brokerage website Taxixchange.
Hong Kong investors are pouring money into taxis.
The city’s traffic agency has stopped issuing taxi licenses since 1994. The issued licenses are freely traded on the market.
`This is clearly a bubble,` said Billy Mak, a professor at Hong Kong Baptist University. `Investors feel they have few tools in the market, due to the squeeze on real estate and the stock market.`
Investors then often lease the vehicles back to taxi management companies.
Cheung King-sum – senior leader of Sintat said many investors have left real estate.
Kenny Wong also has 4 new cars purchased in recent years.
According to Cheung, a taxi can help the owner earn HK$18,000 per month, after deducting management, maintenance and insurance costs.
`Every industry in Hong Kong can go up or down. So you just need to seize the opportunity of time and policy,` Shek said.
