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Housing Tenure and Informational Asymmetries
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management, Building and Real Estate Economics.
Lund University.
(English)In: Journal of Real Estate Research, ISSN 0896-5803Article in journal (Refereed) Accepted
Abstract [en]

The paradigm shift of focus from rental apartments to owner occupied units on the Swedish property market has led to a substantial number of rental apartments being converted to cooperative apartments. Such conversions are typically done at prices below market value. This provides a setting with strong financial incentives for tenants involved in such a conversion to take advantage of their informational advantage regarding the financial management of a cooperative, compared to less informed neighbors and buyers on the general market. This setting also provides a reliable way of estimating the persistence and effects of such an informational asymmetry through nearly 200,000 apartment transactions in Stockholm, Sweden, during the period of 2005 through mid-2014. We find evidence supporting that insiders take advantage of an informational asymmetry; as newly formed cooperatives set monthly fees artificially low in order to increase the probability of a conversion as well as apartment values. However, market participants seem to discount this informational asymmetry as recently converted apartments sell at lower prices.

National Category
Economics
Research subject
Real Estate and Construction Management
Identifiers
URN: urn:nbn:se:kth:diva-211517OAI: oai:DiVA.org:kth-211517DiVA, id: diva2:1129654
Note

QCR 20170814

Available from: 2017-08-04 Created: 2017-08-04 Last updated: 2018-04-02Bibliographically approved
In thesis
1. Essays on Foreclosures and Housing Debt
Open this publication in new window or tab >>Essays on Foreclosures and Housing Debt
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of four self-contained essays in the field of real estate economics, and specifically, the market for single-family homes. The first three essays examine sales of foreclosed properties, while essay four is on the conversion process of rental apartments to owner-occupied units in the co-operative form. These topics have a common denominator in the analysis of real estate markets and a link to debt financing. The effect of a foreclosure on price is examined through several methods. In the first essay, a spatial hedonic model is applied on transaction data. In the second essay, the impact on holding-period returns and the rate-of-turnover is estimated through propensity-score matching. Hedonic regressions and appraisal data is used in the third essay, which analyzes the determinants of the price impact caused by a forced sale. The impact of local market conditions is tested and a discount on price is related to the search process among market participants.

The second topic of conversions is addressed in essay four, which focuses on an informational asymmetry between tenants involved in the conversion process and other market participants. An incentive to mismanage housing co-operatives financially is examined through hedonic models applied to apartment transaction data. 

Abstract [sv]

Denna avhandling består av fyra självständiga uppsatser inom området fastighetsekonomi, och mer specifikt marknaden för ägda bostäder. De tre första uppsatserna undersöker exekutiva försäljningar av bostäder medan uppsats fyra undersöker processen att ombilda hyresrätter till bostadsrätter. Dessa två teman har gemensamt att fastighetsmarknaden och relationen mellan fastigheter och skuldfinansiering analyseras. Effekten på pris som orsakas av en exekutiv försäljning undersöks med flera metoder. I uppsats ett tillämpas en spatial hedonisk modell på transaktionsdata. I den andra uppsatsen undersöks den påverkan som en exekutiv försäljning har på omsättningshastighet och avkastning genom propensity-score matchning. Hedoniska modeller och data med uppskattade värden används i uppsats tre, som undersöker faktorer som påverkar den priseffekt som orsakas av en exekutiv försäljning. Påverkan av lokala marknadsförhållanden testas, och en rabatt relateras till sökprocessen hos köpare och säljare.

Det andra temat i denna avhandling behandlas i uppsats fyra som har fokus på en informationsasymmetri mellan de hyresgäster som är inblandade i ombildningsprocessen från hyreslägenheter till bostadsrätter, och andra marknadsaktörer. Ett incitament för att missköta bostadsrättsföreningens ekonomi undersöks genom hedoniska modeller som tillämpas på transaktionsdata. 

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2018. p. 39
Series
TRITA-ABE-DLT ; 187
Keyword
Real Estate Economics, Housing, Foreclosure, Mortgage, Hedonic Modeling, Propensity-Score Matching, Informational Asymmetries, Matching Theory
National Category
Economics and Business
Research subject
Real Estate and Construction Management; Economics; Business Studies
Identifiers
urn:nbn:se:kth:diva-225158 (URN)978-91-7729-735-2 (ISBN)
Public defence
2018-05-04, L1, Drottning Kristinas väg 30, Stockholm, 13:00 (English)
Opponent
Supervisors
Funder
VINNOVA
Note

QC 20180403

Available from: 2018-04-03 Created: 2018-04-02 Last updated: 2018-05-15Bibliographically approved

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