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Estimating the apartment foreclosure discount in Kuala Lumpur

Wong, Woei Chyuan and Daud, Md Nasir and Lee, Janice Y. M. and Pooi, Leng Ng (2015) Estimating the apartment foreclosure discount in Kuala Lumpur. In: 21st Annual Conference of the Pacific Rim Real Estate Society (PRRES), January 18 -21 2015, Kuala Lumpur, Malaysia. (Unpublished)

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This paper examines the price differential between properties traded in the auction market and private negotiated market.With the exception of anecdotal information which suggests that auctioned or foreclosed properties in Malaysia tend to be sold at a deep discount, no study has thus far attempted to quantify this foreclosure discount.We uncover this question by examining listing price of apartment properties in Kuala Lumpur during 2009-2014.For each of the auctioned apartment in our sample, we match it with comparable non-auctioned apartment located in the same building block.This matching strategy essential net out the locational and neighbourhood characteristics of the properties, thus, allowing us to attribute the price differential to the “stigma effect” associated with auctioned or foreclosed properties.We document that auctioned apartments are listed at a discount of 34% as compared to apartments listed in the private negotiated market.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Auction sales, Auctioned properties, Private negotiated sales, Stigma effect, Foreclosure discount
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: School of Economics, Finance & Banking
Depositing User: Dr. Woei Chyuan Wong
Date Deposited: 08 Sep 2015 01:35
Last Modified: 17 Apr 2016 03:54
URI: http://repo.uum.edu.my/id/eprint/15424

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