Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/25318
Title: Wealth transfer in forward property markets
Authors: Leung, BYP 
Keywords: Asymmetric information
Forward property market
Presale properties
Repeat sales method
Wealth transfer
Issue Date: 2010
Publisher: Taylor & Francis co-Published with Vilnius Gediminas Technical University
Source: International journal of strategic property management, 2010, v. 14, no. 3, p. 258-270 How to cite?
Journal: International journal of strategic property management 
Abstract: The principal-agent problem arising from asymmetric information in presales of uncompleted properties in forward property markets has been well-recognized. Since buyers are not able to inspect the uncompleted properties when they make the purchases, developers may hide information about the negative aspects of the properties or over-state the quality in order to generate an extra profit in the presales on top of the equilibrium value as if the properties were sold in the spot market. In this regard, the study adapted a forward-spot property repeat sales pricing model to explore the pricing of presale properties compared to that of spot properties in which the principal-agent problem does not exist. The findings suggest that developers were able to impose a wealth transfer from the buyers in pricing presale properties taking the advantage of asymmetric information embedded in forward property markets.
URI: http://hdl.handle.net/10397/25318
ISSN: 1648-715X
EISSN: 1648-9179
DOI: 10.3846/ijspm.2010.19
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