Please use this identifier to cite or link to this item: https://scholarbank.nus.edu.sg/handle/10635/224033
Title: THE IMPACT OF TIME ON MARKET ON PROPERTY PRICES: A BUYER'S PERSPECTIVE
Authors: TONG, LOK LAM
Keywords: Real Estate
Yu Shi Ming
2018/2019 RE
RE
Issue Date: 16-May-2019
Citation: TONG, LOK LAM (2019-05-16). THE IMPACT OF TIME ON MARKET ON PROPERTY PRICES: A BUYER'S PERSPECTIVE. ScholarBank@NUS Repository.
Abstract: Real estate has traditionally been a popular investment vehicle due to its potential for capital appreciation, ability to hedge against inflation, and stable rental income yield. This paper seeks to understand developer pricing strategies as well as the behaviour of investors of private properties, specifically those sold in new property launches. With the knowledge that developers adapt their list prices according to the sales, the basis of the analysis is to test the impact of time on market (TOM) on the actual transacted sale prices, and subsequently show how TOM may play a role in the investment outcome. A total of 27,418 new sale transactions of non-landed private properties between 2011 and 2012 were obtained from the Real Estate Information System (REALIS). Using a hedonic pricing model, a study of the sale price of newly launched condominiums and apartments found a positive relationship between TOM and transacted price. The results showed that properties that were bought early (shorter TOM) were sold for significantly lower prices than properties with longer TOM. A second repeated sales model was employed to examine the impact between the initial TOM and capital gains. Out of the 27,418 new sale transactions recorded between 2011 and 2012, 2,696 had subsequent repeat sales transactions within the study period. Results showed a negative relationship between initial TOM and capital gains, indicating that properties that were bought nearer to project initial launch generally gave better returns. Overall, the study gives us insights on developer pricing strategies, and allows us to understand the impacts of the time on market on the property prices from an investor’s perspective.
URI: https://scholarbank.nus.edu.sg/handle/10635/224033
Appears in Collections:Bachelor's Theses

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