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Apartment foreclosure discount in Kuala Lumpur

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. This notion is explored by comparing the listing price of auctioned apartments wit...

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Main Authors: Wong, W.C., Ng, P.L., Lee, J.Y.M., Daud, M.N.
Format: Article
Published: Taylor & Francis 2015
Subjects:
HG Finance
TH Building construction
Online Access:http://eprints.um.edu.my/19438/
http://dx.doi.org/10.1080/14445921.2015.1058034
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spelling my.um.eprints.194382018-09-28T01:32:17Z http://eprints.um.edu.my/19438/ Apartment foreclosure discount in Kuala Lumpur Wong, W.C. Ng, P.L. Lee, J.Y.M. Daud, M.N. HG Finance TH Building construction 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. This notion is explored by comparing the listing price of auctioned apartments with comparable non-auctioned apartments located within the same building blocks in Kuala Lumpur during the period 2009-2014. The property auction market is predominately relied upon to dispose of foreclosed properties in Malaysia. It is found that foreclosed apartments are listed at a discount of 33.4% as compared to apartments advertised in the private negotiated market. This discount is attributed to “stigma effect” associated with auctioned properties and the imperfections of the Malaysian auction market such as auctioned properties may not carry a clean title, potential buyers cannot view the properties prior to auction and may not obtain vacant possession of the properties. The “proxy effect” was minimal since the matching strategy adopted would have netted out the differentials in locational and neighbourhood characteristics between auctioned and non-auctioned properties. Taylor & Francis 2015 Article PeerReviewed Wong, W.C. and Ng, P.L. and Lee, J.Y.M. and Daud, M.N. (2015) Apartment foreclosure discount in Kuala Lumpur. Pacific Rim Property Research Journal, 21 (2). pp. 127-138. ISSN 1444-5921 http://dx.doi.org/10.1080/14445921.2015.1058034 doi:10.1080/14445921.2015.1058034
institution Universiti Malaya
building UM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaya
content_source UM Research Repository
url_provider http://eprints.um.edu.my/
topic HG Finance
TH Building construction
spellingShingle HG Finance
TH Building construction
Wong, W.C.
Ng, P.L.
Lee, J.Y.M.
Daud, M.N.
Apartment foreclosure discount in Kuala Lumpur
description 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. This notion is explored by comparing the listing price of auctioned apartments with comparable non-auctioned apartments located within the same building blocks in Kuala Lumpur during the period 2009-2014. The property auction market is predominately relied upon to dispose of foreclosed properties in Malaysia. It is found that foreclosed apartments are listed at a discount of 33.4% as compared to apartments advertised in the private negotiated market. This discount is attributed to “stigma effect” associated with auctioned properties and the imperfections of the Malaysian auction market such as auctioned properties may not carry a clean title, potential buyers cannot view the properties prior to auction and may not obtain vacant possession of the properties. The “proxy effect” was minimal since the matching strategy adopted would have netted out the differentials in locational and neighbourhood characteristics between auctioned and non-auctioned properties.
format Article
author Wong, W.C.
Ng, P.L.
Lee, J.Y.M.
Daud, M.N.
author_facet Wong, W.C.
Ng, P.L.
Lee, J.Y.M.
Daud, M.N.
author_sort Wong, W.C.
title Apartment foreclosure discount in Kuala Lumpur
title_short Apartment foreclosure discount in Kuala Lumpur
title_full Apartment foreclosure discount in Kuala Lumpur
title_fullStr Apartment foreclosure discount in Kuala Lumpur
title_full_unstemmed Apartment foreclosure discount in Kuala Lumpur
title_sort apartment foreclosure discount in kuala lumpur
publisher Taylor & Francis
publishDate 2015
url http://eprints.um.edu.my/19438/
http://dx.doi.org/10.1080/14445921.2015.1058034
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score 13.211869

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