Hong Kong has long suffered from the problem of building dilapidation, particularly in the old districts. Other than stricter enforcement against irresponsible homeowners and intensive public education campaigns, the local government initiated to solve the problem via an incentive approach. In November 2000, the government announced publicly a list of poorlyperforming buildings, hoping that the property owners would be motivated to undertake building repair or refurbishment by market forces. As the literature suggested, physical conditions of residential properties, particularly those concerning communal areas and services, might not be fully priced by the market due to information asymmetry. It is envisaged that additional information pumped into the housing market will alter the price gradient between high-quality and low-quality properties as the purchasers will undertake self-protection behaviours in view of the risks associated with the poorly-performing properties. This study aims to empirically examine whether public knowledge of poor conditions of apartment buildings affected the sale prices of these properties based on an analysis of panel data in Hong Kong. Yet, the analysis results showed that properties in blacklisted buildings were not transacted at a discount, compared with those in nonblacklisted buildings before the blacklisting exercise, and the release of public information about the blacklist did not create a relative diminution of the property prices of the blacklisted buildings. Policy implications follow.
|Title of host publication||Housing, Housing Costs and Mortgages : Trends, Impact and Prediction|
|Editors||Szilard KIS, Istvan BALOGH|
|Publisher||Nova Science Publishers, Inc.|
|Number of pages||18|
|Publication status||Published - Jan 2013|
Bibliographical noteThe work described in this paper was partially supported by a grant from City University of Hong Kong (Project No. 7200123). The author would like to thank you for Miss Stella Yau for the assistance offered in the data collection process.
- Apartment properties
- Building dilapidation
- Hedonic price analysis
- Information asymmetry
- Public information