The Hong Kong residential market is unique in several aspects: restricted land supply, high price volatility, high appreciation rate, a small group of large developers, and a huge public housing sector. Assuming that higher price appreciation and volatility can be attributed to the limited land supply, this study examines the relationships among developers’ housing-supply decisions, government land-supply decisions, and public housing policies. Using data for the 1973-1997 period, our result shows that an increase in land supply by the Hong Kong government may not be a solution to the perceived shortage of housing supply in Hong Kong. This finding indicates that it is important to examine developers’ profit maximization strategies when enacting public policies related to property markets.
{"title":"International Real Estate Review","authors":"Rose Neng Lai, Ko Wang","doi":"10.53383/100017","DOIUrl":"https://doi.org/10.53383/100017","url":null,"abstract":"The Hong Kong residential market is unique in several aspects: restricted land supply, high price volatility, high appreciation rate, a small group of large developers, and a huge public housing sector. Assuming that higher price appreciation and volatility can be attributed to the limited land supply, this study examines the relationships among developers’ housing-supply decisions, government land-supply decisions, and public housing policies. Using data for the 1973-1997 period, our result shows that an increase in land supply by the Hong Kong government may not be a solution to the perceived shortage of housing supply in Hong Kong. This finding indicates that it is important to examine developers’ profit maximization strategies when enacting public policies related to property markets.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"104 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80858223","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This is the first study applying the econometric analysis of piecewise-linear budget constraints arising from space-linked property taxation to Japanese housing data. The model employed is the classical Hausman type with convex piecewise-linear budget constraints and fixed preferences. We estimate that if spaced-linked property taxation for newly built houses is abolished, it would then eliminate a current excess tax burden per household of approximately 25,000 yen.
{"title":"International Real Estate Review","authors":"M. Seko","doi":"10.53383/100011","DOIUrl":"https://doi.org/10.53383/100011","url":null,"abstract":"This is the first study applying the econometric analysis of piecewise-linear budget constraints arising from space-linked property taxation to Japanese housing data. The model employed is the classical Hausman type with convex piecewise-linear budget constraints and fixed preferences. We estimate that if spaced-linked property taxation for newly built houses is abolished, it would then eliminate a current excess tax burden per household of approximately 25,000 yen.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"33 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84837112","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses the house price indices of 20 metropolitan statistical areas (MSAs) across the United States from January 1991 to April 2018 to analyze the dynamic connectedness of the housing markets in these MSAs. By estimating the connectedness of the entire sample before, during, and after the subprime mortgage crisis, this paper compares the changes in the impact of each regional housing market in the abovementioned MSAs during the stated time period. The results show that housing markets in west coast MSAs are the most influential, and the spatial distribution of this influence is affected by the subprime mortgage crisis because, compared to other periods, the fewest MSAs have a positive net impact during the crisis period and are found along the coast. The influence of the west coast cities increases after the subprime mortgage crisis compared to that before the crisis, probably because the house prices in these cities recover more quickly. In addition, an increase in connectedness represents more systematic risks and also influences the connectedness of the housing markets with other financial markets. The results of this paper also indicate that if the Federal Reserve uses monetary policies to interfere with the housing market, this might increase the default risks of the entire housing market across the United States, and a financial crisis from the spread of default risks might ensue. By discussing the linkage of the regional housing markets across the United States, we provide another warning indicator for the risks of housing markets, risks linked to other financial markets, and uncertainty risks for the overall economy.
{"title":"International Real Estate Review","authors":"T. C. Lin, S. Hsu","doi":"10.53383/100274","DOIUrl":"https://doi.org/10.53383/100274","url":null,"abstract":"This paper uses the house price indices of 20 metropolitan statistical areas (MSAs) across the United States from January 1991 to April 2018 to analyze the dynamic connectedness of the housing markets in these MSAs. By estimating the connectedness of the entire sample before, during, and after the subprime mortgage crisis, this paper compares the changes in the impact of each regional housing market in the abovementioned MSAs during the stated time period. The results show that housing markets in west coast MSAs are the most influential, and the spatial distribution of this influence is affected by the subprime mortgage crisis because, compared to other periods, the fewest MSAs have a positive net impact during the crisis period and are found along the coast. The influence of the west coast cities increases after the subprime mortgage crisis compared to that before the crisis, probably because the house prices in these cities recover more quickly. In addition, an increase in connectedness represents more systematic risks and also influences the connectedness of the housing markets with other financial markets. The results of this paper also indicate that if the Federal Reserve uses monetary policies to interfere with the housing market, this might increase the default risks of the entire housing market across the United States, and a financial crisis from the spread of default risks might ensue. By discussing the linkage of the regional housing markets across the United States, we provide another warning indicator for the risks of housing markets, risks linked to other financial markets, and uncertainty risks for the overall economy.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"6 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84715557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper offers an explanation for the existence of price control on new houses in Korea, which is deemed both inefficient and inequitable. This phenomenon cannot be explained by the conventional model of rent seeking or the capture theory of regulation. Instead, it is attributable to the popular belief that the removal of the price regulation will lead to the increase in the overall housing price by increasing the demand for existing houses that are a perfect substitute for new houses. However, the paper, using a stock-adjustment model of the housing market, demonstrates that the claimed outcome cannot materialize under perfect foresight or adaptive expectation. The outcome is possible in the short run under a peculiar expectation scheme of a self-fulfilling nature. But even in this case, the price increase will be a one-time event and in the long-run overall housing prices will fall below the level that would prevail if the price regulations were maintained.
{"title":"International Real Estate Review","authors":"Chung-Ho Kim, Kwung-Hwan Kim","doi":"10.53383/100016","DOIUrl":"https://doi.org/10.53383/100016","url":null,"abstract":"This paper offers an explanation for the existence of price control on new houses in Korea, which is deemed both inefficient and inequitable. This phenomenon cannot be explained by the conventional model of rent seeking or the capture theory of regulation. Instead, it is attributable to the popular belief that the removal of the price regulation will lead to the increase in the overall housing price by increasing the demand for existing houses that are a perfect substitute for new houses. However, the paper, using a stock-adjustment model of the housing market, demonstrates that the claimed outcome cannot materialize under perfect foresight or adaptive expectation. The outcome is possible in the short run under a peculiar expectation scheme of a self-fulfilling nature. But even in this case, the price increase will be a one-time event and in the long-run overall housing prices will fall below the level that would prevail if the price regulations were maintained.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"40 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81388349","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In contemporary practice, feng shui incorporates a wide range of concepts considered to affect a person’s luck. These include traditional ideas about site selection and building design, as well as newer beliefs about the “luckiness” of certain numbers. Focusing on an area with a relatively high percentage of Chinese households in Auckland, New Zealand, this paper uses hedonic price analysis to investigate whether house values are affected by lucky and unlucky numbers. Sales transactions for 1989 to 1996 are used in this analysis. The results demonstrate that lucky house numbers are capitalised into house values.
{"title":"International Real Estate Review","authors":"Steven C. Bourassa, Vincent S. Peng","doi":"10.53383/100013","DOIUrl":"https://doi.org/10.53383/100013","url":null,"abstract":"In contemporary practice, feng shui incorporates a wide range of concepts considered to affect a person’s luck. These include traditional ideas about site selection and building design, as well as newer beliefs about the “luckiness” of certain numbers. Focusing on an area with a relatively high percentage of Chinese households in Auckland, New Zealand, this paper uses hedonic price analysis to investigate whether house values are affected by lucky and unlucky numbers. Sales transactions for 1989 to 1996 are used in this analysis. The results demonstrate that lucky house numbers are capitalised into house values.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"1045 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77638997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Yuming Fu, T. Somerville, Mengdi Gu, Tongcheng Huang
This paper reviews the urban redevelopment activities in Shanghai as the land market reforms were introduced. We focus on the impact of land use institutions on the spatial pattern of these activities. Sites for private real estate redevelopment were supplied by individual districts in the city. But the need for districts to pay for the resettlement of displaced residents contributed to a spatial mismatch between the supply of redevelopment sites and the market demand for commercial real estate space. Resettlement costs are highest at the high demand locations. State owned enterprises and institutions occupying land allocated by the state also engaged in real estate development. Whereas the density of private redevelopment was sensitive to the volume of commercial activities in a district, this does not appear to have been important in determining the location of the significant increase in the stock of commercial space resulting from development by local enterprises and institutions. This growth shows considerable decentralization between 1993 and 1996, 50 Fu, Somerville, Gu and Huang indicative of spatially inefficient redevelopment activities by land-rich state enterprises.
{"title":"International Real Estate Review","authors":"Yuming Fu, T. Somerville, Mengdi Gu, Tongcheng Huang","doi":"10.53383/100012","DOIUrl":"https://doi.org/10.53383/100012","url":null,"abstract":"This paper reviews the urban redevelopment activities in Shanghai as the land market reforms were introduced. We focus on the impact of land use institutions on the spatial pattern of these activities. Sites for private real estate redevelopment were supplied by individual districts in the city. But the need for districts to pay for the resettlement of displaced residents contributed to a spatial mismatch between the supply of redevelopment sites and the market demand for commercial real estate space. Resettlement costs are highest at the high demand locations. State owned enterprises and institutions occupying land allocated by the state also engaged in real estate development. Whereas the density of private redevelopment was sensitive to the volume of commercial activities in a district, this does not appear to have been important in determining the location of the significant increase in the stock of commercial space resulting from development by local enterprises and institutions. This growth shows considerable decentralization between 1993 and 1996, 50 Fu, Somerville, Gu and Huang indicative of spatially inefficient redevelopment activities by land-rich state enterprises.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"60 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72737159","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study provides an empirical study on the relationship between institutional factors and real estate returns. Using data from both developed and emerging market countries, our empirical results show that institutional factors do influence real estate returns and these factors may not be fully priced. We find that when controlling return volatility and level of economic growth, a higher property return is expected in countries where the economy is more efficient and has more economic freedom. Our results support the view that the combination of "lumpiness" of real estate investment and the volatile nature of international capital flows may expose property investors to extra investment risk, which needs to be compensated. Our results also indicate that an improvement in a country's economic efficiency and economic freedom may reduce property variance risk thus enhancing property returns.
{"title":"International Real Estate Review","authors":"Hsien-hsing Liao, J. Mei","doi":"10.53383/100010","DOIUrl":"https://doi.org/10.53383/100010","url":null,"abstract":"This study provides an empirical study on the relationship between institutional factors and real estate returns. Using data from both developed and emerging market countries, our empirical results show that institutional factors do influence real estate returns and these factors may not be fully priced. We find that when controlling return volatility and level of economic growth, a higher property return is expected in countries where the economy is more efficient and has more economic freedom. Our results support the view that the combination of \"lumpiness\" of real estate investment and the volatile nature of international capital flows may expose property investors to extra investment risk, which needs to be compensated. Our results also indicate that an improvement in a country's economic efficiency and economic freedom may reduce property variance risk thus enhancing property returns.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"188 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85845269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the most important issues in emerging markets is the timing and intensity of land development decisions and how these decisions affect property values. In these markets, newly developed office space and residential units often account for a substantial proportion of the aggregate supply of similar types of developed properties. In this article I use a real option model to study the land development problem faced by a central planner. The optimal capital intensity, the value of land and the post- development rents and property values in these markets are strikingly lower than the corresponding values in the markets where the demand is perfectly elastic. Furthermore, the optimal capital intensity and the value of land are most sensitive to the market demand conditions in the emerging markets experiencing the fastest growth or greatest uncertainty, or at times when interest rates or construction costs are lowest.
{"title":"International Real Estate Review","authors":"Yuming Li","doi":"10.53383/100014","DOIUrl":"https://doi.org/10.53383/100014","url":null,"abstract":"One of the most important issues in emerging markets is the timing and intensity of land development decisions and how these decisions affect property values. In these markets, newly developed office space and residential units often account for a substantial proportion of the aggregate supply of similar types of developed properties. In this article I use a real option model to study the land development problem faced by a central planner. The optimal capital intensity, the value of land and the post- development rents and property values in these markets are strikingly lower than the corresponding values in the markets where the demand is perfectly elastic. Furthermore, the optimal capital intensity and the value of land are most sensitive to the market demand conditions in the emerging markets experiencing the fastest growth or greatest uncertainty, or at times when interest rates or construction costs are lowest.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"16 4 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1999-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83152403","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 1999-01-01DOI: 10.1142/9789812795618_0011
Hsien-hsing Liao, J. Mei
This study provides an empirical study on the relationship between institutional factors and real estate returns. Using data from both developed and emerging market countries, our empirical results show that institutional factors do influence real estate returns and these factors may not be fully priced. We find that when controlling return volatility and level of economic growth, a higher property return is expected in countries where the economy is more efficient and has more economic freedom. Our results support the view that the combination of "lumpiness" of real estate investment and the volatile nature of international capital flows may expose property investors to extra investment risk, which needs to be compensated. Our results also indicate that an improvement in a country's economic efficiency and economic freedom may reduce property variance risk thus enhancing property returns.
{"title":"Institutional Factors and Real Estate Returns - A Cross Country Study","authors":"Hsien-hsing Liao, J. Mei","doi":"10.1142/9789812795618_0011","DOIUrl":"https://doi.org/10.1142/9789812795618_0011","url":null,"abstract":"This study provides an empirical study on the relationship between institutional factors and real estate returns. Using data from both developed and emerging market countries, our empirical results show that institutional factors do influence real estate returns and these factors may not be fully priced. We find that when controlling return volatility and level of economic growth, a higher property return is expected in countries where the economy is more efficient and has more economic freedom. Our results support the view that the combination of \"lumpiness\" of real estate investment and the volatile nature of international capital flows may expose property investors to extra investment risk, which needs to be compensated. Our results also indicate that an improvement in a country's economic efficiency and economic freedom may reduce property variance risk thus enhancing property returns.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"1 1","pages":"21-34"},"PeriodicalIF":0.7,"publicationDate":"1999-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81843029","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Taiwan is committed to reducing greenhouse gas emissions and established a green building certification system called the ecology, energy saving, waste reduction, and health (EEWH) system in 1999. However, only 0.44% of the private projects have obtained green building labels in 2017, and almost all of them have expired and not renewed. This study analyzes green attributes of market preferences by using a multi-regression. The results show that green indicators have a significant impact on green premium. That is, greenery, building envelope design, energy conserving air conditioning, construction waste reduction and indoor environment quality have discounted effects on the green premium. But some high-weighed indicators in EEWH are not favored by developers, and therefore have negative impacts on prices, such as building envelope design and energy conserving air conditioning. On the contrary, some low-weighed indicators have positive impacts on prices, such as energy conserving indoor lighting and water conservation, and therefore are already incorporated by developers based on buyers’ demand. It is suggested to modify the weighting of such indicators so that they are in line with buyers’ preferences, which will incentivize developers to incorporate green attributes in future projects that are more valued by buyers.
{"title":"Effects of Green Attributes on Residential Price in Taiwan","authors":"F. Chen, Jen-Hsu Liang, Michael Mak","doi":"10.53383/100345","DOIUrl":"https://doi.org/10.53383/100345","url":null,"abstract":"Taiwan is committed to reducing greenhouse gas emissions and established a green building certification system called the ecology, energy saving, waste reduction, and health (EEWH) system in 1999. However, only 0.44% of the private projects have obtained green building labels in 2017, and almost all of them have expired and not renewed. This study analyzes green attributes of market preferences by using a multi-regression. The results show that green indicators have a significant impact on green premium. That is, greenery, building envelope design, energy conserving air conditioning, construction waste reduction and indoor environment quality have discounted effects on the green premium. But some high-weighed indicators in EEWH are not favored by developers, and therefore have negative impacts on prices, such as building envelope design and energy conserving air conditioning. On the contrary, some low-weighed indicators have positive impacts on prices, such as energy conserving indoor lighting and water conservation, and therefore are already incorporated by developers based on buyers’ demand. It is suggested to modify the weighting of such indicators so that they are in line with buyers’ preferences, which will incentivize developers to incorporate green attributes in future projects that are more valued by buyers.","PeriodicalId":44050,"journal":{"name":"International Real Estate Review","volume":"40 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"1998-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74625028","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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