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Paper eres2013_44:
Unraveling the Inflated House Price in the New Housing Supply

id eres2013_44
authors Ismail, Rahah
year 2013
title Unraveling the Inflated House Price in the New Housing Supply
source 20th Annual European Real Estate Society Conference in Vienna, Austria
summary There are a lot of concern both by public at large and the government on the inflated house price in the housing market, fearing that it could lead to property bubble and raises the issue of affordability. On a closer look at the property transactions data, it was observed that the main increase in the house price is often related to the primary housing market, i.e. new supply in the housing market whereas the sales price of existing supply, or the secondary market, remains stable or increase marginally. What is more baffling is that the two markets are sometimes in the same location, with same accessibility, with units available for sale but the sales price of houses in these market shows a marked difference. It is grounded in theory that price is a function of demand and supply. However, if supply is in abundance in the secondary market, what causes the price differentiation between these two markets. This research attempts to unravel the inflated house price in the primary market. First, the research investigates on market efficiency i.e. the extent of dissemination of sales information of both housing in the primary and secondary market. Second, it explores the level of complexity/ease in purchasing houses in the primary and secondary market. Third, it examines the costs of purchasing houses in the two markets to the purchasers. Fourth, it looks at what the housing in the primary and secondary market has to offer in terms of facilities, amenities, design and technology.This research involves looking at published data in the Annual Property Market report, interview with the Malaysian Association of Estate Agents, Residential Housing Developers Association, Auctioneers as well as survey using questionnaires to purchasers of new housing.At the end of this research, it will give an understanding why purchasers are willing to pay more for houses in the primary market, whilst similar housing in the same locality is available in the secondary housing market. The research will suggest what can be done to reduce the price gap between the primary and secondary market.
keywords Inflated house, Housing market efficiency, Cost of purchasing, Primary housing market
series ERES:conference
type paper session
email rahah@jpph.gov.my
more http://library.eres.org/cgi-bin/rsa98.pl?conf=ERES2013&type=session&theme=D&slot=6703
content file.pdf (671,177 bytes)
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ratings
session D-9: Housing Markets & Economics
last changed 2014/10/21 21:51
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