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Key determinants of time on the market: an analysis of residential housing market in Sri Lanka

Nishani Champika Wickramaarachchi (Department of Estate Management and Valuation, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Nugegoda, Sri Lanka)
Seetha Kusum Chandani (Government Valuation Department, Colombo, Sri Lanka)
Malka Thilini (Department of Estate Management and Valuation, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Nugegoda, Sri Lanka)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 5 November 2020

Issue publication date: 12 November 2021

284

Abstract

Purpose

Developing residential units is crucial in the socio-economic development of a country. The investor faces not only uncertain transaction price (price risk), but also uncertainties about the marketing period risk. Predicting when the incurred money is being realized is difficult because of the imperfect nature of the real estate market. Thus, the purpose of this study is to analyze the variables that explain the time on the market (TOM) of housing units, identifying the relationships in-between and the effects on TOM of residential properties.

Design/methodology/approach

Following a multi-stage sampling process, a random sample of 120 housing units was selected. Data were collected using a self-administered questionnaire. The questionnaire contained 57 variables that can affect TOM. Semi-structured interviews were conducted to confirm some of the data and information on residential units from the developers. Direct observations were conducted to verify certain physical attributes and, finally, they were comprehensively analyzed using quantitative analysis techniques in SPSS 16.0 Statistical package.

Findings

Results confirmed that lesser advertising prices, attractive environment, proximity to the city center and proper shape of lands reduce the TOM. Similarly, higher prices, longer distance to the city center and irregular shape of land increase the TOM. The results strengthen the necessity of a comfortable environment appropriate to live, probably with greenery or water bodies, which is a key influential factor that reduces the TOM in Sri Lanka.

Originality/value

wIn the Sri Lankan context, there are few contributions to the real estate literature in this regard. Many scholars have concentrated on physical and economic characteristics, whereas this research adds the environmental factors. Therefore, this research makes a significant contribution to the body of knowledge in this area, as it puts more attention on including several variables, as well as newly introduced variables as determinants. Consumers can apply the research findings to assess the relative importance of housing attributes and services which they perceive most valuable, and then to make their purchase decisions. The findings also contribute to the investigations of the behavior of housing attributes and enable knowing as to what factors are to be promoted and what to be omitted to gain a shorter TOM.

Keywords

Acknowledgements

The research was supported by a grant from the Centre for Real Estate Studies (CRES), DEMV, USJ.

Citation

Wickramaarachchi, N.C., Chandani, S.K. and Thilini, M. (2021), "Key determinants of time on the market: an analysis of residential housing market in Sri Lanka", International Journal of Housing Markets and Analysis, Vol. 14 No. 5, pp. 913-935. https://doi.org/10.1108/IJHMA-06-2020-0071

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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