Apartment foreclosure discount in Kuala Lumpur

Wong, Woei Chyuan; Ng, Pooi Leng; Lee, Janice Yim Mei; Daud, Nasir

doi:10.1080/14445921.2015.1058034

Cited by 8 publications

(8 citation statements)

References 17 publications

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“…Lusht (1996) and Dotzour et al (1998) and Chow, Hafalir and Yavas (2015) find auctioned properties sold at premium compared to private negotiated properties in Melbourne, Australia, Christchurch, New Zealand and Singapore, respectively. Mayer (1998), Allen and Swisher (2000) and Wong et al (2015), on the other hand, document a discount for auctioned properties over their negotiated counterparts in Los Angeles, Florida and Kuala Lumpur, respectively.…”

Section: Discussionmentioning

confidence: 99%

“…The reader is referred to Wong et al (2015) for a complete discussion of auction process in Malaysia. Foreclosure auction sales market in Malaysia is less developed as compared to IJHMA 10,4 their counterparts in the USA along these dimensions.…”

Section: Institutional Background and Literature Review 21 Property Auction In Malaysiamentioning

confidence: 99%

“…This is because borrowers are liable for any shortfall between sale proceeds from the auction and outstanding loan. Wong et al (2015) document that foreclosure properties in Kuala Lumpur, Malaysia, are listed at 33.4 per cent discount compared to their non-foreclosed neighbors within the same building block due to the imperfections of Malaysian auction market [2].…”

Section: Introductionmentioning

confidence: 99%

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Seller ethnicity and property characteristics: foreclosure sales in Malaysia

Wong

Lee²,

Daud

et al. 2017

IJHMA

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Purpose The purpose of this paper is to examine the determinants of property sale probability and sale price at auction in Kuala Lumpur, Malaysia. Design/methodology/approach A two-stage Heckman sample selection model is used for this research. The first stage involves the estimation of a probit model on a successful sale. The second stage introduces an additional selection variable, the inverse Mills ratio, as an explanatory variable to the sale price estimation equation. Findings The authors find that Chinese-owned auctioned properties have higher sale probability and are sold at higher prices as compared to Indian and Malay-auctioned properties. Properties auctioned by the largest auction house outperformed other smaller auctioneers. Auction characteristics such as proximity to the city center, number of previous auction attempts and number of online viewers are positively related to sale price and sale probability. Social implications The findings on the substantially lower sale price obtained by Malay and Indian borrowers compared to their Chinese counterparts imply that it is much harder for these borrowers to be relieved from financial distress. The two plausible explanations offered in this paper for this price differential, i.e. racial residential segregation and ownership restriction, warrant further study. Originality/value First, the authors consider the explanatory power of seller ethnicity, number of online viewers and auctioning route which are new to the literature. Second, they use a Heckman model that addresses possible selection bias of sold properties. This methodology is unexplored in the auction literature.

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Section: Discussionmentioning

confidence: 99%

Section: Institutional Background and Literature Review 21 Property Auction In Malaysiamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Seller ethnicity and property characteristics: foreclosure sales in Malaysia

Wong

Lee²,

Daud

et al. 2017

IJHMA

Self Cite

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“…Most of the existing literature on foreclosures has used a single-equation ordinary least squares (OLS) test in order to investigate the main determinants in the auction segment (LUSHT 1996;DOTZOUR et al 1998;WONG et. al.…”

Section: Regression Modelmentioning

confidence: 99%

Italian Auction Market: Features of Discounted Forced Sale Price

Amoruso

Mariani

d’Amato

et al. 2020

Real Estate Management and Valuation

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The purpose of the paper is to investigate the main causes of discount between list price and forced sale value in the Italian real estate auction segment, in favor of more comprehensive determination of the value of mortgage underlying guarantees; this would allow for an improvement of further valorization processes of assets intended to obtain a higher selling price.Starting from the results of existing literature, an ordinary least squares regression analysis was conducted in order to point out the main determinants of the discount between list price and forced sale value. It has been verified, when sampling 225 cases of forced residential property sales in the South of Italy, that the time constraint of the Italian regulatory framework is more relevant with reference to discount rather than the physical characteristics of assets.The influence of the duration of procedures is proof that even if recent government initiatives have led to positive results in terms of reducing the length of procedures, this is not yet satisfactory compared to other European contexts. This provides evidence of the need for further interventions aimed at improving the efficiency of the procedural system, also encouraging recourse to other options that lead to ease judicial burden.

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“…Furthermore, the main causes of discount between list price -i.e. the monetary amount required for a property and determined in the evaluation report -and forced sale value in the real estate auction segment have been explored by numerous Authors [2,6,7,29]. For example, Just et al [12] have investigated the foreclosure discount for the German residential market from 2008 to 2011, by founding a discount equal to 19% and pointing out that the discounts are linked to specific property factors.…”

Section: Introductionmentioning

confidence: 99%