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Article
Publication date: 1 August 2006

Eddie C.M. Hui

Mobility has wide‐range impacts on the financial management of property issues, such as consumption and investment. In the literature of residential mobility, household…

Abstract

Mobility has wide‐range impacts on the financial management of property issues, such as consumption and investment. In the literature of residential mobility, household life cycle is widely acknowledged as an important concept. An array of household demographic factors such as age has been repeatedly found to be significant in influencing mobility. Many previous researches offer few verifi able hypotheses or propositions and their results are conflicting. Some of them also suffer methodological inadequacies. This paper is an attempt to rectify this situation. There are two important contributions by the current research. One is a methodology that employs multivariate methods, which fills the gap of previous research. The second contribution is the large census dataset of Hong Kong which is rare in previous studies. The research is conducted under the framework of life cycle models with emphasis on economic and demographic variables of households. Demographic determinants are found to be more important in explaining population mobility among rental households while economic factors are more pertinent for owners. This may be explained by the different strategies adopted by renters and owners in satisfying their housing needs. Renters are envisaged to base their mobility decisions more on demographic factors. Owners, on the other hand, tend to view home buying as an investment as well and hence put more emphasis on economic factors. It is hoped that this research can shed more light on the topic of residential mobility by drawing on the experience of a large population residing in a small place, Hong Kong

Details

Journal of Financial Management of Property and Construction, vol. 11 no. 2
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 1 August 2016

Eddie C.M. Hui, Ning Ning and Ka Kwan Kevin Chan

As the Chinese Government is planning to transform the economy from an export-oriented economy into a consumption-oriented economy, the impact of Chinese consumers to the…

Abstract

Purpose

As the Chinese Government is planning to transform the economy from an export-oriented economy into a consumption-oriented economy, the impact of Chinese consumers to the economy will become more and more important. However, there is a lack of literature on Chinese consumers’ behavior and the critical factors of shopping malls in China. Hence, this study aims to determine the critical factors of a shopping mall in an urban complex in China from customers’ perspective, using Nanjing Wanda Plaza as an example for our case study.

Design/methodology/approach

This study carries out ranking analysis and factor analysis to determine the critical factors of the shopping mall. Then cluster analysis is applied to divide the customers into three segments, showing the importance of each factor to different customer segments. Furthermore, correspondence analysis is conducted to investigate the relationship between customer segments and customer characteristics (gender, occupation, age and income). This method can show how customer characteristics affect the critical factors of the shopping mall.

Findings

Sensual enjoyable shoppers consider the “soft factors” to be superior to the “hard factors”, whereas the pragmatic shoppers are just the opposite.

Originality/value

This study can serve as a useful reference for developers in designing shopping malls in urban complexes to attract more customers.

Details

Facilities, vol. 34 no. 11/12
Type: Research Article
ISSN: 0263-2772

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Article
Publication date: 6 August 2019

David Kim Hin Ho, Eddie C.M. Hui, Tai Wing Ho and Satyanarain Rengarajan

This paper aims to examine the behavior of “rational” residential developers, under game theory, for their pricing strategy in a competitive environment.

Abstract

Purpose

This paper aims to examine the behavior of “rational” residential developers, under game theory, for their pricing strategy in a competitive environment.

Design/methodology/approach

Results show that residential developers cooperate implicitly for long-term benefit, leading to a slow-down in sales. Developers are motivated to deviate from cooperating at the beginning and at the end of successive periods in a sub-market. Relatively high profits, earnable in the first few periods, provide an allowance to undercut prices and improve sales. For the last few periods, the punishment for any deviation from cooperating is insignificant or zero. Note that the first-mover advantage in a new market is evident. On the effect of uncertainty on the developer’s residential prices, results show that as uncertainty increases, prices decrease while price variability increases.

Research limitations/implications

This study highlights the merits of a uniquely simplified experimental research design for the strategic behavioral pricing of the private residential development market using a game theoretic approach.

Practical implications

This study enhances the understanding of the residential development strategy of developers in the residential development market.

Originality/value

There is limited research on pricing strategy for the private residential development market in Asia.

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Article
Publication date: 23 August 2011

Eddie C.M. Hui and Otto M.F. Lau

The purpose of this paper is to evaluate the viability of rehabilitation from a financial standpoint and examine particularly whether a rehabilitation project is worth…

Abstract

Purpose

The purpose of this paper is to evaluate the viability of rehabilitation from a financial standpoint and examine particularly whether a rehabilitation project is worth carrying out or not. Nowadays, rehabilitation has become all the more important in society. Theoretical option models may explain how to make an optimal decision, but in reality they seem to lack empirical evidence when it comes to some situation. This paper aims to use option models to gauge the likely gain/loss from rehabilitation in face of uncertainties. It seeks to bridge the gap in the rehabilitation field between theory and application for facilities managers and property owners alike.

Design/methodology/approach

The binomial option model and Samuelson‐McKean closed form model are utilised to evaluate the likely financial benefits of the two major rehabilitation schemes, exploring option premiums and hurdle values. The real option approaches provide a useful framework within which to gauge a likely gain (loss) and ascertain the viability of rehabilitation in the midst of uncertainties.

Findings

The real option approaches produce two outcomes values, the option premium and the hurdle value, which are able to provide insight into the likelihood of rehabilitation for facilities managers/property owners in the intricate and dynamic markets. The higher the option premium, the more attractive a rehabilitation project will be. And the hurdle value usefully reveals a critical timing for exercising rehabilitation.

Research limitations/implications

This paper provides a necessary support for sustaining the rehabilitation schemes. It presents an adequate alternative to examine the value of rehabilitation by taking into account uncertainties in real life. It is useful for facilities managers and property owners, who sometimes neglect potential benefit/loss in the uncertainties when making an investment decision.

Practical implications

This paper has established the framework for evaluating the rehabilitation schemes that has practical implications for decision making. The facilities manager, property owner and government should make some adjustments in formulation of their rehabilitation policies and strategies.

Originality/value

This paper provides facilities managers with a means in which the real option approaches are embedded to express benefit/costs of rehabilitation. With the aid of this information, facilities managers/property owners are able to evaluate rehabilitation more effectively and enhance the decision‐making quality.

Details

Facilities, vol. 29 no. 11/12
Type: Research Article
ISSN: 0263-2772

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Article
Publication date: 22 June 2012

Eddie C.M. Hui and Ivan M.H. Ng

This paper aims to test the short‐ and long‐run interrelationships between Hong Kong's residential property market and stock market, as well as market fundamentals and…

Abstract

Purpose

This paper aims to test the short‐ and long‐run interrelationships between Hong Kong's residential property market and stock market, as well as market fundamentals and China‐related factors, between 1990 and 2006.

Design/methodology/approach

The authors observed changes in the relationship between property prices and stock indexes by using Granger causality test, variance decomposition and CUSUM test. In contrast to some other studies, they have, at the same time, identified the break point(s) and variation of relation.

Findings

The findings reveal that the correlation between residential property price and stock index had become weaker over time, even though the trend of residential property price is similar to that of stock index during the sample period. Under such circumstances, it is more likely for investors to reap more benefits through portfolio diversifications.

Research limitations/implications

The credit price effect from the property market to the stock market, as observed between 1990 and 1994, has been replaced by a snowball effect within each of these two markets. In addition, stocks have become a hedge against inflation in the short‐run, while both stocks and real estate investments are utilized as such in the long‐run after 1995. Lastly, it appears that there are signs of interdependence between Hong Kong's stock market and the Chinese economy, whereas contagion might occur between China's economy and Hong Kong's property market.

Originality/value

The paper proffers some insights with regard to both real estate and stocks as investment options, and how closer integration between two regions (or nations) shape the interactions between various markets between them.

Details

Property Management, vol. 30 no. 3
Type: Research Article
ISSN: 0263-7472

Keywords

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Article
Publication date: 5 October 2010

Qian Xu, Heng Li, Eddie C.M. Hui and Zhen Chen

The purpose of this paper is to present results from a pilot research into the Chinese real estate confidence index, called CRE index, with regard to three diverse…

Abstract

Purpose

The purpose of this paper is to present results from a pilot research into the Chinese real estate confidence index, called CRE index, with regard to three diverse aspects, including effective demand and supply, potential demand, and potential supply, and to develop an effective tool for diversity management at different levels in the Chinese real estate market.

Design/methodology/approach

To undertake this research, a novel methodology framework is introduced in terms of the three aspects. Extensive literature review and questionnaire survey are systematically adopted accordingly to work out three individual sub‐indices, and to compose the entire CRE index.

Findings

The research put forward a novel approach to describing the changing situations of the Chinese real estate market by means of the CRE index, which is synthetically calculated based on its three sub‐indices to reflect the three different aspects. For the calculation of the CRE index, data collected from government statistics and specific questionnaire survey are effectively used, and this proves a practical approach as proposed for the research.

Research limitations/implications

Although the CRE index is proposed to be a generic indicator for the Chinese market, this research focuses only on a synthesized CRE index for the local real estate market in Shenzhen, and data collected are also limited from 1999 to 2003. However further research with more comprehensive data can draw an entire picture and provide more reliable forecast based on either local or national data in China.

Practical implications

As it is a generic indicator to reflect changes in the Chinese real estate market, the CRE index provides all stakeholders with a quantitative method to verify history and detect tendency with regard to the progressive development of the market which is influenced by dynamic social and natural conditions.

Social implications

The CRE index has been developed as a tool to support diversity management in the Chinese real estate market, and it is assumed that governors at local, regional, and national levels can all use this tool in macroeconomic regulation and control towards the Chinese real estate market. Others, including developers, investors as well as consumers can all make informed judgments based on the value and trend of the CRE index.

Originality/value

The CRE index uniquely incorporates comprehensive market data and statistics, including historic data from government statistics and current information from questionnaire survey and literatures, into confidence index calculation. In this regard, comparing with other confidence indices for the real estate market, this method is capable of providing more informed predications, especially when statistical data are full and accurate.

Details

International Journal of Housing Markets and Analysis, vol. 3 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

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Article
Publication date: 19 October 2012

Eddie C.M. Hui, Xian Zheng and Wen‐juan Zuo

The purpose of this paper is to explore the long‐run relation and short‐run dynamic correlations between consumption expenditure and household wealth, namely housing…

Abstract

Purpose

The purpose of this paper is to explore the long‐run relation and short‐run dynamic correlations between consumption expenditure and household wealth, namely housing wealth and stock wealth.

Design/methodology/approach

This paper adopts aggregate time‐series data over the period of 1981Q1‐2010Q4 in Hong Kong. It employs the ARDL to cointegration procedure and the multivariate stochastic volatility (MSV) model to investigate the long‐run elasticity and dynamic correlations between aggregate consumption expenditure and household wealth indicators.

Findings

The results suggest that both housing wealth and stock wealth have significant effects on consumption expenditure after controlling for the aggregate income level. The long‐run elasticity of consumption expenditure with respect to housing wealth and stock wealth are 0.3877 and 0.1424 respectively, while the marginal propensity to consume for housing wealth and for stock wealth are 0.2159 and 0.0266 respectively. The dynamic correlation analysis implies that the decrease in housing and stock wealth may further depress consumer behavior and economic condition during the post‐financial crisis period.

Originality/value

This paper provides useful information with regard to the long‐run and dynamic relations between consumption and different types of wealth components.

Details

Property Management, vol. 30 no. 5
Type: Research Article
ISSN: 0263-7472

Keywords

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Article
Publication date: 30 June 2008

Eddie C.M. Hui and Ivan M.H. Ng

The purpose of this paper is to apply a risk‐based option‐pricing framework for property developers to come up with the critical investment timings, based on their…

Abstract

Purpose

The purpose of this paper is to apply a risk‐based option‐pricing framework for property developers to come up with the critical investment timings, based on their tolerance of risk.

Design/methodology/approach

The viability of a project is subject to the potential benefit and market conditions. Option embedded in the project is considered a perpetual call option that is an opportunity to establish a new building on a vacant land. With the aid of scenario testing, whether the immediate implementation is appropriate or not can be examined, and which key factor(s) affects the profit most can be assessed.

Findings

The results reveal that the chosen study case, Chelsea Court project, is highly favorable from a financial standpoint.

Research limitations/implications

Since the Samuelson‐McKean model specializes on non‐expired options that in general fit to the evaluation of options of a land development project with no maturity, it may be limited in evaluating projects with multi‐phases and a maturity date.

Practical implications

This valuation framework allows flexibility to assess the plausible investment timing under various suspicious circumstances about the property market.

Originality/value

The valuation framework presented in this paper provides advice for prospective property developers on whether to invest now or at a later stage to yield the best return.

Details

Journal of Financial Management of Property and Construction, vol. 13 no. 1
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 1 February 2008

Eddie C.M. Hui, Joe T.Y. Wong and Janice K.M. Wan

The long‐standing urban decay problem in Hong Kong continues to receive attention from the government and concerned organisations. However, little attention is paid to the…

Abstract

Purpose

The long‐standing urban decay problem in Hong Kong continues to receive attention from the government and concerned organisations. However, little attention is paid to the financial benefits that can be achieved after old buildings are rehabilitated. This study seeks to evaluate and quantify the value enhancement of aging buildings resulting from rehabilitation.

Design/methodology/approach

Using the direct sales comparison method, the study critically examines over 80 sample buildings across Hong Kong. Residential properties with rehabilitation completed in the public sector are chosen as samples for numerical analysis.

Findings

The results show that: the capital value of the sample buildings after rehabilitation increased by an average of 35.6 percent; the overall appreciation rate of the sample buildings (35.6 percent) exceeds that of other buildings in the same district (20.8 percent); the average price increase of the sample buildings (25.7 percent after adjustment) is greater than that of Type B (40‐69.9 square meters) buildings (18.9 percent) in Hong Kong; positive growth in transaction volume is evidenced from the sample buildings in four districts; and, on average, the benefit to cost ratio of rehabilitation per unit is 10.9 and the net benefit per square foot is HK$461.4 (or US$59.2).

Research limitations/implications

There are potential risks of error arising from the use of assumptions, price adjustments, limited sample size and data from the secondary source.

Practical implications

The analysis is of relevance in confirming the value enhancement arising from rehabilitation and the findings provide a motive for the industry and public for rehabilitation.

Originality/value

The significance of this study is the quantification of the positive effect of rehabilitation.

Details

Facilities, vol. 26 no. 1/2
Type: Research Article
ISSN: 0263-2772

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Article
Publication date: 29 March 2013

Eddie C.M. Hui, Pei‐hua Zhang and Xian Zheng

The purpose of this paper is to identify and analyze crucial facilities management (FM) service dimensions that affect customer satisfaction with regards to the shopping…

Abstract

Purpose

The purpose of this paper is to identify and analyze crucial facilities management (FM) service dimensions that affect customer satisfaction with regards to the shopping mall sector, and provide useful implications for FM companies.

Design/methodology/approach

The study is based on a five‐year longitudinal customer satisfaction survey conducted in five selected shopping malls in Hong Kong. The authors first use stepwise multiple regression method to estimate the relationship between overall customer satisfaction level and nine specific dimensions of FM service for each year, and then compare regression results of five years to identify crucial dimensions.

Findings

The research reveals that: management and maintenance of communal facilities is the most crucial dimension with regard to the overall customer satisfaction; the condition of a washroom is another important dimension for customer satisfaction; communication efficiency and efficacious promotion events are also important for maintaining customer satisfaction.

Originality/value

This paper presents a longitudinal quantitative survey regarding shopping mall FM service satisfaction and identifies several critical dimensions affecting customer satisfaction, which deliver useful information for FM managers who intend to fulfil customer expectations.

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