Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/223214
Title: PRICE, PREMIUM AND MARKET POWER IN A COLLECTIVE SALES MARKET
Authors: LIM ZHONG YI
Keywords: Real Estate
RE
Liao Wen Chi
2016/2017 RE
Collective sales
En-bloc
Market power
Issue Date: 19-May-2017
Citation: LIM ZHONG YI (2017-05-19). PRICE, PREMIUM AND MARKET POWER IN A COLLECTIVE SALES MARKET. ScholarBank@NUS Repository.
Abstract: This research paper moves to uncover the effects of market power on transaction prices for collective sales sites. Due to the heterogeneous nature of real estate, every development and land parcel has its own unique characteristics that is non-reproducible. Therefore studying the impact of market power on real estate is a difficult task, let alone quantifying and analysing the extent of the impact. This paper sheds light on how Subsidiary Proprietors (SPs) of Strata-Titled developments can undertake better pricing strategies, and how developers can adopt more rational bidding behaviours. Aside from being a key motivator for urban renewal, collective sales also serve as an alternative solution to quench developers’ insatiable thirst for development projects. Acquisitions made by developers in collective sales normally require greater cognitive skills and negotiation capabilities. Developers are now faced with a Three-Way Mexican standoff, against other developers and SPs, unlike the typical scenario of competing amongst themselves when purchasing land from the State. The Hedonic Pricing Model is adopted for this paper, while relevant information is obtained from the digital library, FACTIVA and cross-referenced with Singapore’s Urban Redevelopment Authority (URA) records for enhanced accuracy. Overall, the model suggests that collective sales sites with market power are able to command a 7.53% price premium which increases as the market power is exhibited over a larger radius. The entry of new competitors is also found to have a -3.86% effect on transaction prices with further analysis concluding that the effect of competition on land prices is likely to follow a linear trend.
URI: https://scholarbank.nus.edu.sg/handle/10635/223214
Appears in Collections:Bachelor's Theses

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