scholarly journals International Real Estate Review

2015 ◽  
Vol 18 (4) ◽  
pp. 473-501
Author(s):  
Charles Leung ◽  
◽  
Tin Cheuk Leung ◽  
Kwok Ping Tsang ◽  
◽  
...  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Housing Market ◽  
Tax Avoidance ◽  
Property Market ◽  
Cutoff Points ◽  
Market Transaction ◽  
Stamp Duty ◽  
Transaction Tax

We study the implications of a property market transaction tax. As property buyers are obligated to pay a transaction tax ("stamp duty¨ or SD) where the rate increases with the value of the transaction, there are incentives to trade at the cutoff points of the tax schedule or just below them. Thus, both ¡§bunching in transactions¡¨ and ¡§underpricing¡¨ should be observed near those cutoffs. Furthermore, the bunching points should change with the tax schedule. We confirm these conjectures with a rich dataset from the Hong Kong housing market and provide a measure of tax avoidance.

International Real Estate Review

1998 ◽  
Vol 1 (1) ◽  
pp. 64-80
Author(s):  
Jia He ◽  
◽  
Ming Liu ◽  
Keyword(s):  
Hong Kong ◽  
Interest Rate ◽  
Real Estate ◽  
Seasonal Pattern ◽  
Property Market ◽  
Mortgage Loans ◽  
Adjustable Rate ◽  
The Interest Rate

A study on the prepayment behavior of Hong Kong mortgage loans is conducted. With all of the loans as adjustable-rate mortgages (ARMs), we find that 1) Prepayment speeds up and then slows down as the mortgage seasons; 2) Prepayment speeds up as the rate markup decreases; 3) Prepayment speeds up as the interest rate increases; 4) Prepayment speeds up when the profitability ratio of the banks ( the prime-HIBOR spread) is higher; 5) Prepayment speeds up as the price of the property market falls; 6) Prepayment speed is faster for loans with a lower loan-to-value ratio; 7) Prepayment exhibits a seasonal pattern: people tend to prepay in the summer.

scholarly journals International Real Estate Review

2010 ◽  
Vol 13 (1) ◽  
pp. 1-29
Author(s):  
Sam K. Hui ◽  
◽  
Alvin Cheung ◽  
Jimmy Pang ◽  
◽  
...  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Statistical Method ◽  
Bayesian Approach ◽  
Investment Decisions ◽  
Average Price ◽  
Residential Real Estate ◽  
Property Market ◽  
Residential Properties ◽  
Expert Assessments

We have developed a statistical method for the valuation of residential properties using a hierarchical Bayesian approach, which takes into consideration the unique structure of the Hong Kong property market. Our model is calibrated on a dataset that covers all residential real estate transactions in ten major Hong Kong residential complexes from February 2008 to February 2009. Although parsimonious, our model outperforms other valuation methods that are based on average price-per-square- feet or expert assessments. By providing our model-based valuations online without charge, we hope to improve transparency in the Hong Kong housing market, thus enabling consumers to make better investment decisions.

scholarly journals The securitization of residential rental revenue streams in Europe

2017 ◽  
Vol 10 (4) ◽  
pp. 503-518 ◽  
Author(s):  
Jaume Roig Hernando
Keyword(s):  
Real Estate ◽  
Housing Market ◽  
Risk Sharing ◽  
Rental Housing ◽  
Cash Flows ◽  
Property Market ◽  
Investment Funds ◽  
Content Type ◽  
The Usa ◽  
Residential Market

Purpose The purpose of this paper is to analyze the securitization of rental streams, a new investment and finance product introduced in the USA in 2013 that enables fundraising from large residential portfolios owned by major investment funds and investment banking. The securities are made up of non-performance loans as well as real estate portfolios of financial entities. Design/methodology/approach An academic analysis of the European securitization market is performed, as well as a broad overview of the state of the art of the rental housing market and investment property market. Moreover, a market study of Real Estate Owned (hereinafter, REOs) and Real Estate Debts is carried out to determine both the present framework and future trends. Various financial entities and real estate management companies are examined through interviews and data collection to assess the reality of distressed assets and residential portfolios owned by major investors. It introduced the Broker’s Price Opinion concept, de loan-to-value concept and the London Interbank Offered Rate. Findings REO-to-rental securitization is a step forward toward the democratization of finance through the globalization of the residential market, improving risk sharing for major and retail investors. The securitization of rental streams in Europe has not taken off, despite several issuances in the USA since 2013 with significant success where first tranches obtained a credit qualification of triple-A from the majority of the main rating agencies. Originality/value At the end of 2013, a global investment firm launched an innovative finance and investment vehicle that securitized the cash flows originating from leased residential properties. That issue resulted in considerable success and in the development of a new alternative and innovative financing source for real estate activity. Taking into account that housing is a primary need of our society, there is a strong motivation for improving the residential market, and thus, REO-to-rental securitization could help take a step forward in making the housing market more efficient.

scholarly journals International Real Estate Review

2004 ◽  
Vol 7 (1) ◽  
pp. 139-172
Author(s):  
Charles K. Leung ◽  
◽  
Kelvin S. Wong ◽  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Housing Market ◽  
Construction Industry ◽  
Public Expenditure ◽  
Empirical Studies ◽  
Future Research ◽  
Supply Side ◽  
Preliminary Step ◽  
International Standard

Hong Kong is well known for its “housing market bubble”. Both theoretical and empirical studies point to the supply side being the “root of all evil”. This paper takes a preliminary step in understanding the supply side of the Hong Kong market by investigating the construction and related industries. After taking into consideration of the unusual public expenditure, the construction industry seems to be “normal” in international standard. Its relationship with the aggregate economy is also examined. Directions for future research are also suggested.

scholarly journals The Effect of Expected Losses on the Hong Kong Property Market

2021 ◽  
Author(s):  
Ling Li ◽  
Wayne Xinwei Wan
Keyword(s):  
Hong Kong ◽  
Residential Property ◽  
Property Market ◽  
Commercial Property ◽  
Transaction Prices ◽  
Commercial Markets ◽  
Commercial Market ◽  
Market Transaction ◽  
Market Factors ◽  
Loss Effect

AbstractExpected losses anchored to purchase prices can affect actual transactions in different property sectors. Utilizing the data of over a million commercial and residential property transactions in Hong Kong from 1991 to 2015, we find that sellers facing nominal losses relative to their prior purchase prices attained higher selling prices than their counterparts. We suggest two market factors to account for the extent of the loss effect on the market transaction prices. First, the loss effect is only prominent when comparable transaction information is not readily accessible, such as in the less-transacted commercial property market. Second, our results suggest the relevance of the loss effect to the boom-bust property cycle in both the residential and commercial markets. The effect of expected losses on transaction prices is relatively weak in the bust period between 1998 and 2003 when the Hong Kong property market lost almost two-thirds of its value, and it enlarges with the market recovering. The loss effect is not attenuated at the aggregate market level but is associated with strong reductions in price declines in the bust period and in the commercial market. These results have implications for understanding the market adjustment of the loss effect in the property market and its association with the aggregate market dynamics in a boom-bust property cycle.

Impediments to foreign real estate investment in an emerging market

2018 ◽  
Vol 36 (5) ◽  
pp. 479-494 ◽  
Author(s):  
Daramola Thompson Olapade ◽  
Timothy Oluwafemi Ayodele ◽  
Abel Olaleye
Keyword(s):  
Real Estate ◽  
Computer Literacy ◽  
Emerging Market ◽  
Primary Data ◽  
Property Market ◽  
Real Estate Investment ◽  
Content Type ◽  
Transaction Structure ◽  
Significant Difference ◽  
Market Transaction

Purpose The purpose of this paper is to examine the of characteristics of Lagos, Nigeria property market and its submarkets on the prism of the market practitioners’ characteristics, market transaction structure and market maturity. This is done with a view to provide information capable of improving the flow of foreign real estate investment to the Lagos property market. Design/methodology/approach Primary data were sourced through questionnaire administered on firms of property practitioners in the market. A total of 190 firms were selected using the stratified random sampling technique based on their geographical location. Descriptive statistics and Mann−Whitney U Test were employed for data analysis. Findings The results showed that the Lagos property market was characterised by practitioners whose highest level of education was majorly first degree, and with a mean computer literacy ranking of 3.38 on a five-point Likert scale. Also, major transactions in the market included letting and sales. The market maturity index of the market was 2.95 and therefore adjudged as an emerging market. The analysis also revealed that there was no significant difference in the characteristics of the submarkets. Practical implications The results of the study are capable of enhancing investment decision in the market. Originality/value The study differentiates itself from and adds to the previous studies on market characteristics through an examination of the property market on the prism of the market transaction structure, market practitioners’ characteristics and maturity of the market holistically in the context of an African emerging market.

scholarly journals Arbitrage opportunities, efficiency, and the role of risk preferences in the Hong Kong property market

2016 ◽  
Vol 33 (4) ◽  
pp. 735-754 ◽  
Author(s):  
Chun-Kei Tsang ◽  
Wing-Keung Wong ◽  
Ira Horowitz
Keyword(s):  
Hong Kong ◽  
Housing Market ◽  
Small Body ◽  
Total Yield ◽  
Risk Preference ◽  
Empirical Literature ◽  
Primary Concern ◽  
Property Market ◽  
Content Type ◽  
Arbitrage Opportunities

Purpose This paper aims to investigate how a prospective buyer’s optimal home-size purchase can be determined by means of a stochastic-dominance (SD) analysis of the historical data of Hong Kong. Design/methodology/approach By means of SD analysis, the paper uses monthly property yields in Hong Kong over a 15-year period to illustrate how buyers of different risk preference may optimize their home-size purchase. Findings Regardless of whether the buyer eschews risk, embraces risk or is indifferent to it, in any adjacent pairing of five well-defined housing classes, the smaller class provides the optimal purchase. In addition, risk-averters focusing on total yield would prefer to invest in the smallest and second-smallest classes than in the largest class. Research limitations/implications As the smaller class provides the optimal purchase, the smallest class affords the buyer the optimal purchase over all classes in this important housing market – at least where rental yields are of primary concern. Practical implications The findings suggest that in the Hong Kong housing market, long-term investors may be better off purchasing smaller homes. For other type of investors, it depends on their risk preference. Originality/value There is a very small body of empirical literature on housing investment, especially if the focus is on the optimal home-size purchase.

International Real Estate Review

2015 ◽  
Vol 18 (1) ◽  
pp. 45-87
Author(s):  
Charles Leung ◽  
◽  
Edward Chi Ho Tang ◽  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Housing Market ◽  
Initial Public Offerings ◽  
Asset Markets ◽  
Future Research ◽  
Public Offerings ◽  
Underlying Factor ◽  
The World ◽  
Chinese Tourists

This paper argues that since China closes her asset markets, investors turn to Hong Kong instead. The initial public offerings (IPOs) of Chinese firms in the Hong Kong stock market and the local housing market of Hong Kong improve the prediction of each other, as they may serve as a coordinator of herds among investors. Alternative explanations such as the "production conjecture" and ¡§underlying factor conjecture¡¨ are found to be inconsistent with the data. Our results are also consistent with the increasing importance of Chinese tourists in the world. Directions for future research are also discussed.

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