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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, Woei Chyuan, Ng, Pooi Leng, Lee, Janice Y. M., Daud, Md. Nasir
Format: Article
Published: University of Western Sydneys 2015
Subjects:
HD Industries. Land use. Labor
Online Access:http://eprints.utm.my/id/eprint/57847/
http://dx.doi.org/10.1080/14445921.2015.1058034
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spelling my.utm.578472021-12-12T08:01:16Z http://eprints.utm.my/id/eprint/57847/ Apartment foreclosure discount in Kuala Lumpur Wong, Woei Chyuan Ng, Pooi Leng Lee, Janice Y. M. Daud, Md. Nasir HD Industries. Land use. Labor 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. University of Western Sydneys 2015-08-08 Article PeerReviewed Wong, Woei Chyuan and Ng, Pooi Leng and Lee, Janice Y. M. and Daud, Md. Nasir (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 Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
topic HD Industries. Land use. Labor
spellingShingle HD Industries. Land use. Labor
Wong, Woei Chyuan
Ng, Pooi Leng
Lee, Janice Y. M.
Daud, Md. Nasir
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, Woei Chyuan
Ng, Pooi Leng
Lee, Janice Y. M.
Daud, Md. Nasir
author_facet Wong, Woei Chyuan
Ng, Pooi Leng
Lee, Janice Y. M.
Daud, Md. Nasir
author_sort Wong, Woei Chyuan
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 University of Western Sydneys
publishDate 2015
url http://eprints.utm.my/id/eprint/57847/
http://dx.doi.org/10.1080/14445921.2015.1058034
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score 13.211869

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