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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. KTH, School of Architecture and the Built Environment (ABE), Centres, Centre for Banking and Finance, Cefin.
Departement of Technology and Society / Division of Real Estate Science. Lund University.
2016 (English)Report (Other academic)
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 typically are done at prices far 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, as 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 to mid-2014. We find strong support towards a behavior concurrent with moral hazard; as such insiders mismanage the cooperatives by setting monthly fees artificially low in order to increase the probability of a conversion as well as apartment values. Lastly, market participants seem to discount this informational asymmetry as recently converted apartments sell at lower prices.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2016. , 23 p.
Series
Working Paper Series, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin),, 16:3
Keyword [en]
Informational Asymmetries, Real Estate, Housing Tenure
National Category
Economics and Business
Research subject
Real Estate and Construction Management
Identifiers
URN: urn:nbn:se:kth:diva-183015OAI: oai:DiVA.org:kth-183015DiVA: diva2:906634
Note

QC 20160302

Available from: 2016-02-24 Created: 2016-02-24 Last updated: 2016-03-02Bibliographically approved

Open Access in DiVA

Report(510 kB)89 downloads
File information
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Type fulltextMimetype application/pdf

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf