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Article
Publication date: 1 February 2002

Eddie Hui and Tsz‐Ying Lui

This paper uses an econometric approach to examine the relationship between real ( ex post) and rationally expected housing prices in Hong Kong over its boom and bust…

Abstract

This paper uses an econometric approach to examine the relationship between real ( ex post) and rationally expected housing prices in Hong Kong over its boom and bust cycle. Models of market fundamentals are developed from a rational expectation hypothesis to compare the ex post housing prices and expected housing prices, and to test whether the housing price can reflect the market fundamentals. The findings suggest that the private housing price in Hong Kong is cointegrated to the market fundamentals in the long‐runP only; and exhibits a volatile performance in the short‐run. The short‐term market “noises” are believed largely to be the result of government intervention and unexpected market fluctuations.

Details

Journal of Property Investment & Finance, vol. 20 no. 1
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 7 August 2017

Maurizio d’Amato

This paper aims to propose a new valuation method for income producing properties. The model originally called cyclical dividend discount models (d’Amato, 2003) has been…

Abstract

Purpose

This paper aims to propose a new valuation method for income producing properties. The model originally called cyclical dividend discount models (d’Amato, 2003) has been recently proposed as a family of income approach methodologies called cyclical capitalization (d’Amato, 2013; d’Amato, 2015; d’Amato, 2017).

Design/methodology/approach

The proposed methodology tries to integrate real estate market cycle analysis and forecast inside the valuation process allowing the appraiser to deal with real estate market phases analysis and their consequence in the local real estate market.

Findings

The findings consist in the creation of a methodology proposed for market value and in particular for mortgage lending determination, as the model may have the capability to reach prudent opinion of value in all the real estate market phase.

Research limitations/implications

Research limitation consists mainly in a limited number of sample of time series of rent and in the forecast of more than a cap rate or yield rate even if it is quite commonly accepted the cyclical nature of the real estate market.

Practical implications

The implication of the proposed methodology is a modified approach to direct capitalization finding more flexible approaches to appraise income producing properties sensitive to the upturn and downturn of the real estate market.

Social implications

The model proposed can be considered useful for the valuation process of those property affected by the property market cycle, both in the mortgage lending and market value determination.

Originality/value

These methodologies try to integrate in the appraisal process the role of property market cycles. Cyclical capitalization modelling includes in the traditional dividend discount model more than one g-factor to plot property market cycle dealing with the future in a different way. It must be stressed the countercyclical nature of the cyclical capitalization that may be helpful in the determination of mortgage lending value. This is a very important characteristic of such models.

Details

Journal of European Real Estate Research, vol. 10 no. 2
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 1 September 1997

Raymond Y.C. Tse

Shows that loan loss expectation plays an important role in determining credit rationing. Shows that the optimal loan size depends on the marginal loan loss, and not on…

Abstract

Shows that loan loss expectation plays an important role in determining credit rationing. Shows that the optimal loan size depends on the marginal loan loss, and not on the initial portfolio position of the bank. While an increase in loan administrative costs leads to a larger optimal loan size, restricting the loan size is used to minimize default risks. Also shows that under conditions of uncertainty when default risk is present, and if absolute risk aversion is increasing in wealth, a rise in wealth of the bank will lower the amount of asset to be allocated in risky loans even if credit can be properly priced.

Details

Journal of Property Finance, vol. 8 no. 3
Type: Research Article
ISSN: 0958-868X

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Article
Publication date: 1 September 2005

Vachara Peansupap and Derek Walker

The purpose of this study was to explore and identify factors affecting adoption and implementation of information and communication technology (ICT) in large…

Abstract

The purpose of this study was to explore and identify factors affecting adoption and implementation of information and communication technology (ICT) in large ICT‐experienced Australian construction organizations. During 2002 the researchers undertook an online survey, supplemented by a hardcopy collection option, to gather data from three major construction organizations with many years experience with implementing and adopting IT. The analysis concentrated on a common class of ICT adopted across the three organizations so that factor analysis could be validly undertaken. Results identified 11 factors that were found to influence ICT diffusion and adoption by the organizations that were grouped into management, individual, technology and workplace environment categories. These concurred with theory from the change management, innovation diffusion and organizational learning literature. Further, in‐depth qualitative analysis through case studies (beyond the scope of this paper) also helped to explain and make sense of the results. The results help to better explain human related factors in particular in terms of the broader and emerging literature of organizational learning and innovation adoption with a clear focus on how the people‐side of ICT diffusion and adoption is undertaken. This ICT diffusion and adoption study is undertaken at the firm‐level (micro analysis) as opposed to the industry level (macro analysis) and so provides insights into the interplay between diffusion and adoption concepts.

Details

Construction Innovation, vol. 5 no. 3
Type: Research Article
ISSN: 1471-4175

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Article
Publication date: 6 August 2019

Yun Fah Chang, Wei Cheng Choong, Sing Yan Looi, Wei Yeing Pan and Hong Lip Goh

The purpose of this paper is to analyse and predict the housing prices in Petaling district, Malaysia and its six sub-regions with a set of housing attributes using…

Abstract

Purpose

The purpose of this paper is to analyse and predict the housing prices in Petaling district, Malaysia and its six sub-regions with a set of housing attributes using functional relationship model.

Design/methodology/approach

A new multiple unreplicated linear functional relationship model with both the response and explanatory variables are subject to errors is proposed. A total of 41,750 housing transacted records from November 2008 to February 2016 were used in this study. These data were divided into 70% training and 30% testing sets for each of the selected sub-regions. Individual housing price was regressed on nine housing attributes.

Findings

The results showed the proposed model has better fitting ability and prediction accuracy as compared to the hedonic model or multiple linear regression. The proposed model achieved at least 20% and 40% of predictions that have less than 5% and 10% deviations from the actual transacted housing prices, respectively. House buyers in these sub-regions showed similar preferences on most of the housing attributes, except for residents in Shah Alam who preferred to stay far away from shopping malls, and leasehold houses in Sri Kembangan are more valuable. From the h-nearest houses indicator, it is concluded that the housing market in Sungai Buloh is the most volatile in Petaling District.

Research limitations/implications

As the data used are the actual housing transaction records in Petaling District, it represents only a segment of Malaysian urban population. The result will not be generalized to the entire Malaysian population.

Practical implications

This study is expected to provide insights to policymakers, property developers and investors to understand the volatility of the housing market and the influence of determinants in different sub-regions. The potential house buyers could also use the model to determine if a house is overpriced.

Originality/value

This study introduces measurement errors into the housing attributes to provide a more reliable analysis tool for the housing market. This study is the first housing research in Malaysia that used a large number of actual housing transaction records. Previous studies relied on small survey samples.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 5
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 1 March 2006

Albert P.C. Chan, Y.H. Chiang, Stephen W.K. Mak, Lennon H.T. Choy and M.W.W James

Efficient manpower planning has been recognized as a critical aspect for the development of an economy. In 2001, the Works Bureau of the Hong Kong SAR Government…

Abstract

Efficient manpower planning has been recognized as a critical aspect for the development of an economy. In 2001, the Works Bureau of the Hong Kong SAR Government (predecessor of Environment, Transport and Works Bureau) commissioned an HKPolyU consultancy team to develop a computer‐based model to estimate the demand for different categories of construction personnel. This article presents the concept and features of the manpower demand‐forecasting model developed for the construction industry of Hong Kong. The forecasting model is formulated on the basis of the labour multiplier approach by deriving the relationship between the number of workers required and the project expenditure in the given project duration. Multipliers for 61 project types were derived for 38 labour trades using completed project data. The labour demand by occupation for each project can then be estimated by multiplying the corresponding multipliers and the estimated project expenditure. Several unique features of the model have been developed, including “normalization” and “contract cost adjustment factor”. Normalizing the labour multipliers can facilitate the prediction of occupational labour requirements at different stages of a construction project. The adjustment factor is introduced to eliminate the discrepancy between the original estimates and final contract values so as to enhance the estimation accuracy. The model can also be used to predict the number of jobs created for a given level of investment. The government can apply this model to check and compare which project types will generate most jobs before committing public money. This model could be easily adopted and adapted by foreign construction authorities while planning manpower.

Details

Construction Innovation, vol. 6 no. 1
Type: Research Article
ISSN: 1471-4175

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Article
Publication date: 4 May 2012

Patricia Fraser, Martin Hoesli and Lynn McAlevey

The purpose of this paper is to compare responses of house prices in three important markets when faced with permanent and temporary shocks to income. It additionally…

Abstract

Purpose

The purpose of this paper is to compare responses of house prices in three important markets when faced with permanent and temporary shocks to income. It additionally decomposes each historical house price series into its permanent, temporary and deterministic components.

Design/methodology/approach

Using quarterly data over 1973‐2008, two‐variable systems of house prices and income are specified for three major house‐owning economies: New Zealand (NZ), the United Kingdom (UK) and the United States of America (USA).

Findings

NZ and UK housing markets are sensitive to both permanent and temporary shocks to income, while the US market reacts to temporary shocks with the permanent component having a largely insignificant role to play in house price composition. In NZ, the temporary component of house prices has tended to be positive over time, pushing prices higher than they would have been otherwise; while in the UK, both permanent and temporary components have tended to reinforce each other.

Originality/value

The paper uses state‐of‐the‐art methods to analyse the relationships between income and house prices in three economies.

Details

Journal of European Real Estate Research, vol. 5 no. 1
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 14 June 2019

Rotimi Boluwatife Abidoye, Albert P.C. Chan, Funmilayo Adenike Abidoye and Olalekan Shamsideen Oshodi

Booms and bubbles are inevitable in the real estate industry. Loss of profits, bankruptcy and economic slowdown are indicators of the adverse effects of fluctuations in…

Abstract

Purpose

Booms and bubbles are inevitable in the real estate industry. Loss of profits, bankruptcy and economic slowdown are indicators of the adverse effects of fluctuations in property prices. Models providing a reliable forecast of property prices are vital for mitigating the effects of these variations. Hence, this study aims to investigate the use of artificial intelligence (AI) for the prediction of property price index (PPI).

Design/methodology/approach

Information on the variables that influence property prices was collected from reliable sources in Hong Kong. The data were fitted to an autoregressive integrated moving average (ARIMA), artificial neural network (ANN) and support vector machine (SVM) models. Subsequently, the developed models were used to generate out-of-sample predictions of property prices.

Findings

Based on the prediction evaluation metrics, it was revealed that the ANN model outperformed the SVM and ARIMA models. It was also found that interest rate, unemployment rate and household size are the three most significant variables that could influence the prices of properties in the study area.

Practical implications

The findings of this study provide useful information to stakeholders for policy formation and strategies for real estate investments and sustained growth of the property market.

Originality/value

The application of the SVM model in the prediction of PPI in the study area is lacking. This study evaluates its performance in relation to ANN and ARIMA.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 6
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 1 February 2003

Albert P.C. Chan, James M.W. Wong and Y.H. Chiang

The construction industry plays a significant role to the economy of Hong Kong not only in terms of output but also the employment. The sector, however, has been severely…

Abstract

The construction industry plays a significant role to the economy of Hong Kong not only in terms of output but also the employment. The sector, however, has been severely hit by the economic downturn in recent years resulting in serious unemployment. Employment planning becomes one of the critical aspects for the recovery of the economy. The main objective of this paper is to establish a labour demand model for the Hong Kong construction industry. The unique characteristics and the current conditions of the construction labour market are reviewed. Regression analysis based on 123 construction projects was used to compute the relationship between expenditure and site workers employed. The best predictor of average labour demand of construction projects in Hong Kong is found to be DL = 463 C 0.934, where DL is the actual labour demand in man‐days, C is the final cost of contract in millions. The labour demand‐cost relationship can be applied as a manpower forecasting model to estimate the total labour required for a given type of project. The developed model enables a more reliable and accurate planning of manpower requirements in the construction industry.

Details

Journal of Engineering, Design and Technology, vol. 1 no. 2
Type: Research Article
ISSN: 1726-0531

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Article
Publication date: 1 April 2004

Eddie Chi‐man Hui

The aim of this research is to investigate the effects of land supply (LS) and lease conditions on the housing market. It tests whether there exists a relationship…

Abstract

The aim of this research is to investigate the effects of land supply (LS) and lease conditions on the housing market. It tests whether there exists a relationship: between LS and housing price, between development conditions in government land leases and housing supply, and to what extent these development conditions affect Hong Kong's supply, of private residential flats. This paper focuses on examining the supply side of private housing in Hong Kong, whilst limiting the investigation on how LS and development conditions affect the supply of the private residential property market. The findings of this study bring additional knowledge on a different form of government control over the land market. First, an overview of Hong Kong's housing supply situation is presented. An understanding of Hong Kong's housing situation generates an underlying rationale for this study. In order to understand Hong Kong's land tenure system, Section 2 provides a brief background of the establishment of Hong Kong's leasehold tenure system. Section 3 develops the research framework within which to provide a global synopsis of literature (relating to the effects of leasehold land tenure system, governmental land regulation, development/land use control, and restricted LS on the housing market) and theoretical models for the analysis of LS and lease conditions. Following the analysis of findings, the concluding section presents recommendations for policy change.

Details

Property Management, vol. 22 no. 2
Type: Research Article
ISSN: 0263-7472

Keywords

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