PL EN


2010 | 14 | 3 | 258-270
Article title

WEALTH TRANSFER IN FORWARD PROPERTY MARKETS

Content
Title variants
Languages of publication
EN
Abstracts
EN
The principal-agent problem arising from asymmetric information in presales of uncompleted properties in forward property markets has been well-recognized. Since buyers are not able to inspect the uncompleted properties when they make the purchases, developers may hide information about the negative aspects of the properties or over-state the quality in order to generate an extra profit in the presales on top of the equilibrium value as if the properties were sold in the spot market. In this regard, the study adapted a forward-spot property repeat sales pricing model to explore the pricing of presale properties compared to that of spot properties in which the principal-agent problem does not exist. The findings suggest that developers were able to impose a wealth transfer from the buyers in pricing presale properties taking the advantage of asymmetric information embedded in forward property markets.
Contributors
  • Barbara Y. P. Leung, Department of Building and Real Estate, The Hong Kong Polytechnic University, Hong Kong, China
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
10LTAAAA08734
YADDA identifier
bwmeta1.element.512ded59-3d22-3412-a684-c15364cb38d1
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