Ho Kim Hin David
Email Address
rsthkhd@nus.edu.sg
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Publication A constant-quality price index for resale public housing flats in Singapore(2003) Ong, S.E.; Ho, K.H.D.; Lim, C.H.; REAL ESTATELargely because of the significant societal and economic aspects of public housing in Singapore, the current resale price index is published regularly by the Housing and Development Board (HDB). Based on average transaction prices, this HDB index does not control for a shift in the mix of public housing resale flats transacted. This paper looks into the usefulness of the current HDB resale price index that is reflective of pure price appreciation across time. Adopting the varying parameter technique, a constant-quality HDB resale price index is constructed instead for the period between January 1997 and June 2000. The usefulness of a constant-quality resale price index is evaluated using three assessment criteria. First, through a series of comparative studies between a constant-quality HDB resale price index and other resale price indices, it is found that the constant-quality resale price index provides a better indication of pure price appreciation. Secondly, the parameters of price determinants are found to be unstable across distinct phases of the market cycle. During market recovery, greater premiums are generally attainable for better-quality flats due to positive market sentiment and improved economic conditions. Nevertheless, greater discounts are also generally attainable for lower-quality flats due to greater expectation attributable to rising resale prices. This implies that owners of better-quality flats would probably be better motivated to put up their units for sale during a market recovery. Thirdly, the difference in the values of price determinants during different phases of the market cycle suggests that the varying parameter techniques should be appropriate for the construction of a constant-quality HDB resale price index.Publication Real estate market cyclical dynamics: The prime office sectors of Kuala Lumpur, Singapore and Hong Kong(2014) Ho, K.H.D.; Addae-Dapaah, K.; REAL ESTATEPurpose: The purpose of this paper is to help us understand the real estate cycle and offers an analysis using a vector auto regression (VAR) model. The authors study the key international cities of Hong Kong, Kuala Lumpur and Singapore. The authors find four key outcomes. One, the real estate cycle is generally different from the underlying business cycle in local markets for the cities studies. Two, the real estate cycle is more exaggerated in the construction and development areas than in rents and vacancies. Three, the vacancy cycle tends to lead the rental cycle. And four, new construction completions tend to peak when vacancy is also peaking. The authors believe that future research should try to help understand the linkages that drive these outcomes. For example, are rigidities in the local permit and construction markets responsible for the link between construction peaks and vacancy peaks? Design/methodology/approach: Real estate market cyclical dynamics and its estimation via VAR model offers an insightful set of practical and empirical models. It affirms a comprehensive theoretical underpinning for analysing the prime office and residential sectors of the capitol cities of Kuala Lumpur, Singapore and Hong Kong in the fast developing Asia region. Its unrestricted form also provides an effective and insightful way of modelling real estate market cyclical dynamics utilising only real estate market indicators, furnished by real estate market data providers. Findings: The office rental VAR model for Singapore (SOR), KL (KOR) and HK (HOR) show good fits. In the HOR model, rents and vacancies are negatively signed and significant for certain lagged relationships with other variables and with rents themselves. The office CV VAR model for Singapore (SOCV), KL (KOCV) and HK (HOCV) show good fits. In the HOCV model, capital values (CVs) and initial yields are negatively signed and significant for certain lagged relationships with other variables and with CVs themselves. Impulse response functions specified for seven years to mirror a medium-term real estate market cycle "die out" to zero for the stationary VAR models that are estimated for the endogenous variables. The accumulated responses asymptote to some non-zero constant. Practical implications: The VAR model offers a complete and meaningful dynamic system of solely real estate variables for international real estate investors and policy makers in decision making. Its unrestricted form offers an effective and insightful way of modelling real estate market cyclical dynamics utilising only real estate market indicators, which can be reliably provided by a dedicated real estate information and consultancy provider of international standing. Originality/value: The theoretical model offers a complete dynamic model system of the real estate space market, comprising a unique system of six linked equations that denote the relationship among supply, demand, construction, vacancy and rent over time, inclusive of price response slopes and lags. The VAR model enables the investigation of the effect of the lagged values of all the variables concerned. It also enables the explicit and rigorous quantitative forecasts of say rents and CVs when the rest of the variable can be forecasted beforehand. © Emerald Group Publishing Limited.Publication Planned urban industrialization and its effect on urban industrial real estate valuation: The Singapore experience(2006) Ming, Y.S.; Hin, H.K.; REAL ESTATEThis paper investigates the challenge posed by an optimal balance of land use because of chronic land resource scarcity, in conjunction with the growing requirement for quality-intensive industrial accommodation in the island-state city of Singapore. Optimizing land resource, under a strong physical planning framework and its physical planning administration, is envisaged to set the conditions that facilitate the creation of values for urban industrial real estate assets. This value creation enables urban industrial real estate values to find their steady state levels, under a structure of causal links. It can significantly represent, although not completely, the efficient price mechanism for allocating land to its highest and best industrial use. Thus, a generalized multiple regression analysis model is estimated to robustly explain urban industrial real estate asset value in terms of the structural price-discovery factors, under the physical planning framework and its administration. This paper extends the urban real estate valuation model to incorporate a geographic information system that enables a spatial distribution analysis of urban industrial real estate asset values. © 2005 Elsevier Ltd. All rights reserved.Publication Office price index lagging in Singapore and Hong Kong(2007) Hui, E.C.M.; Yu, K.H.; Ho, D.K.H.; REAL ESTATEPrice discovery of real estate investment has been getting lots of attentions from researchers and it is generally believed that lagging errors exist in appraisal-based returns of commercial real estate investments, in comparison to other investment instruments traded in the stock market. Due to fewer transactions in the commercial real estate market, it is reasonable to notice a difference in the handling of current market information. By introducing two study approaches along with a test case using Singapore's data, this paper explores the extent of lagging in Hong Kong's commercial (office) real estate values, in a State Space Model with Kalman filter. The findings first suggest that whether appraisalbased indices overstate or understate true values lies in the economy condition at the time. Then, commercial real estate values in Hong Kong are about three months behind the stock market property indices. Also, as indicated by the findings, data collection/selection bias may render a de-lagged index not as efficient as it is supposed to be. This paper provides a different perspective on price discovery and the process of de-lagging property values.Publication Asset value enhancement of Singapore's public housing main upgrading programme (MUP) policy: A real option analysis approach(2009) Ho, D.K.H.; Hui, E.C.-M.; Ibrahim, M.F.B.; REAL ESTATEThe main upgrading programme (MUP) is a major policy implemented by the Singapore Housing Development Board (HDB) since the 1990s. This heavily subsidised policy is highly targeted in order to enhance the social and economic value of public housing in Singapore. It benefits HDB households residing in the older HDB housing estates in terms of both an enhanced asset value of the household's flat and a quality living environment. An HDB flat owner whose precinct is selected for upgrading under the MUP policy is envisaged to be holding a call option to upgrade his flat, as this option to upgrade is valuable and it has an opportunity to command a higher price in the HDB resale market. This paper estimates the option premiums for upgrading by utilising the intuitive and explicit numerical method solution of the binomial real option pricing model and the Samuelson-McKean closed-form solution. The embedded real option premiums under the MUP policy are estimated at S$10 300 and S$2 000 for the popular three-room HDB flat and four-room HDB flat respectively. It is also found that government subsidies have a significant impact on the option premiums. © 2009 Urban Studies Journal Limited.Publication Dynamics of assisted homeownership in Singapore(2009) Hui, E.C.M.; Yu, K.H.; Ho, D.K.H.; REAL ESTATEThis study aims to first investigate if the market-force hypothesis and upgrading hypothesis still hold in explaining the demand for first-hand housing development board (HDB) flats in Singapore. Then, simulations are carried out via system dynamics models to assess how policy changes, differentiated in scales and frequencies, affect such demand. The findings, while refuting the market-force hypothesis, extend the upgrading hypothesis, as capital appreciations through selling in the resale HDB market not only contribute to the upgrading of properties among HDB owners, but also provide incentives for nonhomeowners to make the first move in realizing the "Singapore Dream." Further, simulations point out that either too few or too many institutional changes in response to market adjustments render the HDB system unhealthy. The former induces fluctuating demand, while the latter likely generates extra administrative cost that could cause long-term effects on the financial position of the HDB. © 2009 Urban Affairs Association.Publication The greening of Singapore's national estate(1997) Hin, D.H.K.; Chong, R.T.Y.; Wai, T.K.; Briffett, C.; SCHOOL OF ARCHITECTURE; SCHOOL OF BUILDING & REAL ESTATEThis paper presents the unique but achievable case of Singapore's concern for its physical environment by adopting an innovation-managing approach to enhance the practice of effective environmental management. The country's built environment is treated as the estate of the nation, largely because of the indirect influence of government in the physical planning regime with an emphasis on carefully integrated urban design, and of the direct influence of government in the provision of physical infrastructure through government agencies. These have facilitated a synergistic response by the local community comprising policy makers, businesses, industries, citizens and residents, in making environmental management a way of life in Singapore. Copyright © 1997 Elsevier Science Ltd.Publication A Fuzzy Logic framework for Intelligent Building (IB) classification for commercial buildings in the tropics(2003) Tan, F.; Lee, S.E.; Ho, D.; Schafer, W.; REAL ESTATE; BUILDINGIntelligent Building (IB) as a class of buildings appears to have significant variation in scope and definition with respect to geographic region and the status of economic development of city or state. From the real estate point of view, IB represents real assets with investment premium for the technological "value added". They are to yield benefits for all the relevant stakeholders including a return on investment. It is therefore important to be able to measure and classify IB in order to avoid false claims, and more importantly to ensure an appropriate and objective discourse and development of IB. This could also assist in the optimisation of investment resources. This paper presents a proposed framework to measure and classify IB using a holistic approach. The proposed classification system, using the fuzzy logic approach, can lead to the establishment of a consistent performance based structure for assessing and classifying IB - the standard fuzzy logic expert system (FES). With the subsequent establishment of the Innovative Fuzzy Logic Expert System (IFES), such a performance based building evaluation and assessment structure, other relevant development trends in addition to IB may be developed.Publication Risk management in large physical infrastructure investments: The context of seaport infrastructure development and investment(2006) Ho, M.W.; Ho, K.H.; REAL ESTATEThe growth of developing countries depends very much on having adequate physical infrastructure to support economic development. As a strategic response, many physical infrastructure investments like seaports are being privatised and highly purpose built. This paper investigates the merits of viable seaport infrastructure investment, typically lumpy and requiring large capital expenditure and long payback period. A key feature of such an infrastructure investment is to structure a defensible risk management strategy to deal with uncertainties. This risk management strategy can provide responsive alternatives to new opportunities. Singapore's Jurong Port is the case study. The original risk management strategy is analysed in 1996, and deploys risk simulation for scenario planning in conjunction with constraint optimisation. This original risk management strategy finds that it is more defensible to configure Jurong Port, and a seaport in general, into the maritime industrial and logistics park (MILP) instead of the higher-margin and purpose-built container terminal strategy, which is inherently volatile (ie uncertain or risky). The planned scenarios and their projections, under the original risk management strategy are then compared with the consequential developments in reality. The results highlight that the sustained viability of Jurong Port in 2004 is attributed to that risk management strategy, originally developed in 1996. © 2006 Palgrave Macmillan Ltd All rights reserved.Publication Correlation and volatility dynamics in international real estate securities markets(2009) Liow, K.H.; Ho, K.H.D.; Ibrahim, M.F.; Chen, Z.; REAL ESTATEWe study international correlation and volatility dynamics of publicly traded real estate securities using monthly returns from 1984 and 2006. We also examine, for comparison, the correlations among the corresponding stock markets. A multivariate dynamic conditional correlation model captures the time-varying correlation within the full period. We confirm lower correlations between all real estate securities market returns than those between the stock market returns themselves. Some significant variations and structural changes in the correlation structure happened within the sample period. We detect a strong and positive connection between real estate securities market correlations and their conditional volatilities. We also find the international correlation structure of real estate securities and the broader stock market are linked to each other. Our results have economic motivations regarding the potential integration of international real estate securities markets and the possibility of including information on changing correlations and volatilities to design more optimal portfolios for international real estate securities. © 2008 Springer Science+Business Media, LLC.
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