Proceedings from the PRRES Conference - 2006
The 12th Annual Conference of the Pacific Rim Real Estate Society 
 January 22 to 25, 2006, Auckland,  New Zealand

Delegate Papers  - Including Keywords and Abstract

Papers shown as |Refereed| have been refereed through a peer review process involving an expert international board of referees headed by Professor Yu Shi Ming from the National University of Singapore.  Full papers were refereed with authors being required to make any changes prior to presentation at the conference and final publication as a refereed paper in these proceedings.

AUTHOR: Alastair Adair, Stanley Mcgreal And James R. Webb
TITLE: Diversification Effects Of Private Versus Public Real Estate In The Uk
ABSTRACT: "This study uses annual data from 1975 through 2003 to construct mean-variance optimal portfolios for the UK. Real estate return data for all UK properties from the Investment Property Databank (IPD), for UK pooled property funds and for UK property shares are used, in addition to UK common stocks and gilts (government bonds). The different mixed-asset portfolio allocations using the different real estate return series are compared/contrasted. Finally, the return series are unbundled for UK IPD real estate, UK common stocks and UK gilts into income and appreciation returns and additional optimal mean-variance portfolios are constructed for income returns, appreciation returns and income and appreciation returns."
View the Full Paper

AUTHOR: Hera Antoniades
TITLE: Property Tax - A Preliminary Study On The Initial Implications Of The Ralph Report Recommendations For The Real Property Industry |Refereed|
KEYWORDS: "Taxation, real property, property tax, CGT, capital gains tax, Ralph Committee Report"
ABSTRACT: "The real property industry is one that intersects the boundaries of many aspects of taxation. The changes recommended by the Ralph Report (the Review of Business Taxation, A Tax System Redesigned, 1999 chaired by John Ralph AO), have had flow-on consequences to the real property sector. The Ralph Report itself contained about 280 recommendations which were aimed at improving the competitiveness and efficiency of Australian Business, reduce compliance costs and enhance the stability of taxation arrangements. This paper will focus on those issues that relate primarily to the real property industry sector. Therefore, this research paper examines a number of interrelated areas concerning the recommendations of the “Review of Business Taxation, A Tax System Re-designed” on the real property industry sector. The interrelated areas which have been selected includes the Capital Gains Tax regime, the Simplified Tax System, and Accelerated Depreciation. The Ralph Report initially gave the appearance that everyone would benefit, however, this was not so. The findings in this paper show the Capital Gains Tax regime to have created a more complex tax system, with a different tax treatment of capital gains according to the structure of the ownership of the asset. The Simplified Tax System result for small business was to face higher costs to establish eligibility for the various concessions introduced, and the removal of Accelerated Depreciation as a direct trade-off for the company tax rate reduction did little to enhance new property development. "
View the Full Paper

AUTHOR: Armitage, Lynne And Yau, Yung
TITLE: Heritage Protection In The Built Environment In Hong Kong And Queensland: A Cross-Cultural Comparison |Refereed|
KEYWORDS: Built heritage; Cultural differences; Hong Kong; Queensland
ABSTRACT: "Comparative study of the conservation policies or practices in different places is certainly a useful means of achieving a better approach to the conservation of the built cultural heritage in urban areas. In spite of the abundant literature in this field, it appears that the cultural dimensions of the issues have always been neglected. With this background, the origins of this study lie in two sets of ideas. First, protection of built heritage is a people-centred exercise so it is largely influenced by the culture of the community. Second, the effort to transfer heritage protection ideologies from the West to the East (or vice versa) may be in vain because of the pre-existing perspectives of people or the cultural impasse. A comparative study of the policies for the protection of the built heritage in Hong Kong and Queensland was thus conducted. The two centres selected for study are a representative sample because they experienced colonial regime by the same sovereignty while they are dominated respectively by Eastern and Western cultures. It is found that the Chinese approach to conservation is building-centric whereas it is setting-centric for the Western one. This difference can be attributed to the divergent cultural beliefs in the East and West. The Eastern wisdoms rooted in Confucianism and Taoism advocate a self-to-the-state model for heritage protection. Therefore, declaration of buildings as monuments is always done on a building-by-building basis and there is a lack of area conservation provision in heritage protection laws in Hong Kong. Contrary to this approach, and in addition to the listing of individual properties, designation of conservation areas or districts is accorded legal backup in Queensland with a view to conserving both building and the substance (i.e. the setting) in a more macroscopic manner. In addition, as prescribed by the traditional Chinese wisdoms, harmony in personal relationships is emphasized so the Hong Kong government tends to engage in lengthy negotiations with the property owners in cases of disagreement rather than to resort to the court, even though this option is reserved in the legislation. Based on these findings, we contend that community education is the vital prerequisite for the integration and assimilation of conservation ideologies from places with different cultural backgrounds. In the case of Hong Kong, the success in applying conservation policies imported from Western countries rests on the sense of ownership of the culture in the community. Only by making people appreciate that conservation is a household affair, concrete support can be obtained from the public to drive an effective conservation campaign. The same principle for conservation ideology exchange can apply to other parts of the world. "
View the Full Paper

AUTHOR: Martin Becker And Manuel Breidenbach
TITLE: Real Estate Securitisation In Germany
KEYWORDS: "Real Estate Securitisation, Real Estate Investment Trusts, Property Shares, Pfandbrief market, Commercial Mortgage Backed Securities"
ABSTRACT: "This paper discusses equity and debt securitisation in Germany and its implications for the property industry. Based on the current market environment the key drivers of change that will lead to an increase in equity and debt securitisation within the next five years are discussed. Furthermore, the crucial legal requirements and restrictions that will determine the future success of German real estate securitisation are identified. In terms of real estate investment, Germany is the biggest market in Europe. Nevertheless, the total securitised real estate equity has only been €7 billion as of August 2005. It is broadly anticipated that the introduction of REITs in Germany will promote a fast expansion of the listed property sector. Particularly by eliminating the current tax disadvantages and by providing corporates and private equity investors with an attractive exit vehicle for their property portfolios. On the debt side, 70% of all German real estate is funded through the use of traditional bank loans. Apart from synthetic debt securitisation structures and the German Pfandbrief market, which exceeds a volume of over €1 trillion, international capital market instruments have not yet been established. However, recent changes in the German legal landscape have opened the door for truesale securitisation deals. The advantages of true-sale transactions, such as higher LTVs, will determine the significant expected growth in the German real estate debt securitisation market."
View the Full Paper

AUTHOR: Henning Bjornlund And Peter Rossini
TITLE: An Empirical Analysis Of Factors Driving Outcomes In Markets For Permanent Water – An Australian Case Study |Refereed|
KEYWORDS: "water markets, water trading, water market prices, Australia, irrigation"
ABSTRACT: "Prices paid in the market for permanent water within the Goulburn Murray Irrigation District in Australia have increased by 15% p.a. over the last ten years. This is less than half the increase that has taken place in the market for temporary water during the same period. Regression analyses show very few relationships between commodity prices and prices of permanent water, with only wine grape prices having a significant positive influence on price. Correlation analyses show strong negative correlations between commodity prices and the price of permanent water, especially with dairy products, which is the main high value industry within the district. The major factors influencing the price of water in the permanent market are: the price in the market for temporary water, the level of seasonal allocation, vine grape prices and interest rates. There is evidence that high value producers have been willing to pay increasing prices as supply has declined, in order to protect their long-term investments in permanent planting and other capital investments such as dairy equipment and cattle. The negative correlation with dairy prices indicates that dairy farmers have accepted higher prices despite a relative fall in commodity prices; the increase in the price of water has therefore come out of irrigators’ profit margins and not out of increased income. Analyses of volumes traded in the market show a positive relationship to the price of dairy commodities. Improved economic conditions in the farm sector have led to increased confidence among irrigators, resulting in a higher willingness to invest in long-term assets. This is despite the fact that the price of this asset has gone up while the relative price of commodities has gone down."
View the Full Paper

AUTHOR: Donald H. Bleich
TITLE: An Analysis Of The Factors That Influence University Student Interest In The Appraisal Profession
ABSTRACT: "Real estate appraisal, by its very nature, is a labor intensive business. The success or failure of the profession will revolve around its ability to attract, train, and retain the best people. This paper looks at the attitudes of undergraduate students majoring in real estate and/or finance towards the real estate appraisal profession. The students were divided into two groups based on their interest in becoming a real estate appraiser. Each student filled out a questionnaire that measured their psychological profile, value systems, financial reward expectations, academic performance, appraisal education, and personal contact with members of the appraisal profession. The results indicate that the real estate appraisal profession is one of the least desirable of the professions studied. This negative attitude towards the appraisal profession, however, can be reversed by increasing student exposure to the real estate appraisal profession. "
View the Full Paper

AUTHOR: Prof Terry Boyd
TITLE: Can We Assess The Worth Of Environmental And Social Characteristics In Investment Property? |Refereed|
KEYWORDS: "sustainability, triple bottom line, appraisal, environmental benchmarks, market value, social indicators, cash flow valuation, simulation"
ABSTRACT: "There is general agreement that environmental and social features, particularly those improving health and productivity of workers, will impact on the functionality of investment property. However there has been a range of opinions on whether this impact can currently be quantified through a valuation exercise (Lutzkendorf and Lorenz (2005), Sayce, Ellison and Smith (2004)). This paper examines the current literature on the assessment of the impact of environmental and social characteristics and the ability to assess the triple bottom line of investment property. It adds to the debate on the possible need for advanced techniques to assess the triple bottom line and identifies the key performance indicators that require measurement. The importance of post occupancy evaluations, the analysis of the current rental market and life cycle assessments, are identified as important components of the evaluation process. The paper also incorporates a triple bottom line case study assessment in Brisbane, Australia, which demonstrates the ability of the cash flow approach to assess the worth of environmental and social characteristics. In conclusion the paper identifies the additional data and research required to assess the worth of investment property using a triple bottom line approach. "
View the Full Paper

AUTHOR: Don Bredin, Gerard O’Reilly And Simon Stevenson
TITLE: Monetary Shocks And Reit Returns
ABSTRACT: "We examine the influence of US monetary policy on Real Estate Investment Trusts through the examination of changes in the fed funds future rate. This form of analysis allows the isolation of the unanticipated component of Federal Reserve rate changes. In comparison with many previous studies of the REIT sector, the results show a strong response in both the first and second moment of REIT returns to unexpected interest rate movements. Further tests are also conducted in relation to asymmetry in the volatility response and to the calm before the storm effect commonly observed in the broader stock markets. In neither case are supportive results obtained, highlighting differences between the REIT sector and the general equity market."
View the Full Paper

AUTHOR: Nelson Chan
TITLE: The Worst Groundwater Contamination Incident In The Southern Hemisphere - A Case Study Of Orica’S Botany Industrial Park
KEYWORDS: "Land contamination, liabilities, remediation, land value"
ABSTRACT: "Sydney appears to be a clean city. However, not many people know that she also suffers from environmental impacts of contaminated land. The ignorance in the past allowed a lot of industrial sites to be contaminated. In recent years, the impacts of the contaminated sites begin to surface like the explosion of time bombs. The most prominent one is Orica’s Botany Industrial Park. This site was formerly owned by the British chemical company ICI. As a result of decades of manufacturing activities and poor environmental practices on the site, chlorinated hydrocarbons leaked into the ground for a period from as early as 1940s to late 1980s. The carcinogenic chemicals mix with groundwater and eventually form a toxic plume that has spread 2 square kilometres covering the area under the houses of about 1000 residents. The plume is now gradually moving towards Botany Bay and is only a few hundred metres from the bay. In unchecked, the toxic plume will bring disaster to marine life and cause health problems to human and animals in contact with the contaminated water in the bay. Orica, an Australian chemical company, acquired the site from ICI in 1997 and immediately inherited the liability to fix the contamination problems. It is estimated that the remediation program will cost A$167 million (about US$125 million) and take 30 years to complete. This paper aims at examining the challenges facing the company and the impact on the value of the site."
View the Full Paper

AUTHOR: K.W. Chau, S.K. Wong, Andy T. Chan And K. Lam
TITLE: How Do People Price Air Quality: Empirical Evidence From Hong Kong |Refereed|
KEYWORDS: "Air pollution, hedonic price model, Hong Kong, property prices"
ABSTRACT: "We investigate how air pollution affects the transaction prices of high-rise apartments in Hong Kong. We use a three-dimensional Reynolds-stress turbulence model to simulate the air pollution level of each unit in high-rise apartment buildings in a densely populated area in Hong Kong (Study Area). We then verify the simulated results with site measurement data. Although the area is small, the variety of building forms and location of streets resulted in significant variation in air quality across apartment units. The apartments in the Study Area are actively traded and relatively homogenous. We estimate the implicit price by constructing a hedonic price model that includes the simulated apartment specific air pollution level as one of the explanatory variables. We find that the apartment prices are more sensitive to air quality in more polluted areas."
View the Full Paper

AUTHOR: Chee Cheong, Richard Gerlach, Simon Stevenson, Patrick J Wilson, Ralf Zurbruegg
TITLE: Permanent And Transitory Drivers Of Securitised Real Estate
ABSTRACT: "This paper re-examines the sensitivity and importance of interest rates and stock market price behavior on securitised property by decomposing their long-run impact between transient and permanent effects. This is achieved within a framework that accounts for endogenously determined structural breaks within the data. The results provide a different perspective on the relationship securitised property has with these markets and sheds new light on their long-run interaction. Once structural breaks are accounted for, the results show that securitised property is sensitive to both interest rate and stock market changes, regardless of the type of securitised property being examined. Evidence also points to companies with increased debt-to-asset ratios and companies that are REITs tax-exempt are still all influenced by both the equity and fixed income markets."
View the Full Paper

AUTHOR: Cheung, A.K.C., Wong, S.K., Yau, Y., Chau, K.W. And Ho, D.C.W.
TITLE: The Effect Of Sars On The Price Of Re-Entrants In Multi-Storey Apartment Buildings
ABSTRACT: "Natural lighting and ventilation have long been a primary consideration in building design, particularly for those high-rise and densely packed apartment blocks where mechanical ventilation is normally secondary. In Hong Kong, there are prescriptive legal requirements governing the provision of natural lighting and ventilation in private buildings. This, coupled with developers’ profit-maximizing incentives, often gives rise to re-entrant designs commonly found in apartment buildings in Hong Kong. This paper aims to study the economic impacts of the disposition of re-entrants on property prices with reference to the revelation of the chimney effect of re-entrants after the occurrence of the mass community outbreak of Severe Acute Respiratory Disease (SARS) in Amoy Gardens in 2003. In this study, we use a hedonic pricing model to examine whether flats designed with a re-entrant is sold at a different price than those without a re-entrant. We draw a sample of property transactions from a popular single residential development with variations in re-entrant designs. A total of 357 transactions were collected, of which 90 were transacted after the SARS event. The model is capable to monitor any significance changes in the premium of re-entrant and its relationship with floor level before and after SARS. Based on the hedonic pricing analysis, we found that the preference for re-entrants is floor-dependent. Before SARS, homebuyers were not fond of re-entrants on low floor levels, but they were willing to pay more for re-entrants as the floor level increases. Yet, the outbreak of SARS did not significantly change their preferences for re-entrants. The market is capable to capitalize the building design into property prices. Developers and designs should improve their building design to meet the ever changing needs of the market. This paper provides an empirical framework to examine how homebuyers price a particular design feature using property transaction data."
View the Full Paper

AUTHOR: Wei (Henry) Chin And Kasia Dziewulska
TITLE: Money Into Property: Keeping On Track In Asia Pacific Real Estate Capital Markets
KEYWORDS: "Real estate capital markets, Asia-Pacific countries, total stock, investible stock, invested stock."
ABSTRACT: "Owing to the increasing level of interest in the Asia-Pacific real estate capital markets, this paper makes the first attempt to quantify the size of real estate capital markets in the region. In terms of total commercial real estate stock and investment grade stock of selected Asia-Pacific markets, a top-down approach is applied. In terms of invested stock (real estate capital market), or the actual holdings of commercial real estate, it is possible to provide approximate figures for public and private equity holdings via a bottom-up approach. Estimates for the size of the real estate capital market will provide an indication of the potential for growth in the investment market in Asia-Pacific. This paper examines eight real estate capital markets in Asia-Pacific countries. The total commercial real estate stock in this study was approximately USD 4.8 trillion, with US$ 2.1 trillion of investment grade stock. The size of the real estate capital market stood at US$ 1.5 trillion at the end of 2004. In addition, US$ 180 billion of capital has come into the real estate markets from 2003 to 2004. "
View the Full Paper

AUTHOR: Choy, Lennon And Chau K.W.
TITLE: Pricing Under Asymmetrical Information - A Case Study On Hong Kong Housing Market
View the Full Paper

AUTHOR: Gregory J Costello
TITLE: The Impact Of Stamp Duty Reductions In First-Home Buyer Markets – A Western Australian Case Study
ABSTRACT: This paper examines the impact of changes in stamp duty in first-home buyer markets by focusing upon 2004 policy initiatives of the Western Australian (W.A.) State Government. The paper examines the impact of policy on demand in first-home buyer markets. Stamp duty is a taxation instrument that can be used by governments to intervene in housing markets by directly influencing the level of transaction costs to home buyers. The W.A. policy initiative acts to reduce stamp duty levels for first-home buyers. Did this improve housing affordability for first-home buyers in these markets? Other research questions analysed include whether the announcement of proposed stamp duty changes in the relevant price segments impacted upon demand for those segments prior to the effective date of reduced stamp duty rates and the impact on demand in these price segments after the policy introduction. How did the announcement impact upon prices in these markets before and after the introduction of the policy? How did the announcement impact upon specific regional housing markets and spatial sub-markets with more cheap housing opportunities? The paper uses data from the WA Valuation Land and Property Database for the period 1988-2005 to test these propositions in an empirical study.
View the Full Paper

AUTHOR: Neil Crosby, Cathy Hughes And Sandi Murdoch
TITLE: Flexible Leasing And The Small Business Tenant
KEYWORDS: "Small business tenants, commercial leases, Australia and UK"
ABSTRACT: "This paper examines the framework for commercial lease negotiations in Australia and the UK. The paper discusses the different approaches to lease negotiations in the different countries and specifically examines the process by which small business tenants negotiate leases in the UK. This paper uses a combination of literature review and survey evidence and finds that in some States in Australia legislation was proposed after a voluntary code had not worked and now all States have a legislative framework. In the UK the Government has relied upon voluntary codes of practice but has decided that the awareness of small business tenants concerning the implications of some lease clauses is still poor. This conclusion is based on the findings of this research which concludes that small businesses in the UK have very different negotiation processes than medium sized enterprises and larger corporate occupiers. Despite being less experienced in taking leases, they are less likely to take professional advice, more likely to take the first lease offered and are less likely to know about the existence of the code of practice. However, they do tend to occupy on shorter leases than larger tenants which have a lower incidence of upwards only ratcheted rent reviews. The voluntary code of practice is having little direct effect on UK practice. However, the literature review gives no indication that any research work has been undertaken on the relative success of the legislative option adopted in Australia and therefore this remains as a major research question "
View the Full Paper

AUTHOR: Éamonn D'Arcy
TITLE: International Sporting Events As Triggers Of Urban Restructuring And Property Market Change: Some Recent Evidence From Three European Cities.
KEYWORDS: international sporting events: urban transformation; land and property markets
ABSTRACT: "Using an implementation structure approach this paper examines the use of headline international sporting events as triggers of urban restructuring and property market change. Based on evidence from three major European cities that have had recent experience of hosting such events, Athens, Greece, Manchester, England and Turin, Italy the paper identifies a number key consideration with respect to benefits and outcomes which are relevant to other cities considering a similar path to urban restructuring in the future. Benefits and outcomes are likely to be maximised if the chosen structure successfully integrates the requirements of the mega event with the cities urban restructuring priorities and individual actor objectives. Capacity constraints in both the public and private sectors are likely to be one of the principal sources of implementation failure. "
View the Full Paper

AUTHOR: William Dimovski
TITLE: The Costs Of Raising Equity Capital By Australian Property Trust Initial Public Offerings |Refereed|
KEYWORDS: "IPOs, underpricing, property trusts, issuing costs"
ABSTRACT: "This paper reports some of the direct costs of raising equity capital by property trust initial public offerings (IPOs) in Australia from 1994 to 2004. It also documents the amount of underpricing by these IPOs. The results indicate the average fees paid to underwriters and/or stockbrokers in managing and marketing the issue was around 3.3% of the public equity capital raised. The average fees paid to legal firms, accounting firms and valuers for their professional involvement and expert reports were 0.4%, 0.2% and 0.1% respectively, totalling 0.7% of the equity raised. Other fees such as printing, listing fees, postage, distribution and advertising cost around 2.1%. The total average direct costs amounted to around 6.1% of the proceeds raised. The average underpricing by these property trust IPOs was 2.6%. This paper also investigates the hypotheses that the percentage direct capital raising costs are influenced by the size of the IPO and whether the IPO is underwritten. This study confirms that larger property trust equity capital raisings have lower percentage total direct costs, however, it does not find that underwriting significantly influences the percentage of total direct costs for these property trust IPOs. 2"
View the Full Paper

AUTHOR: Edward Te Kohu Douglas
TITLE: New Zealand Government Reparations For Breaches Of The Treaty Of Waitangi |Refereed|
ABSTRACT: "Maori are the indigenous New Zealanders. They comprise almost 16% of the country’s population; a proportion projected to increase to 25% by 2035. As a result of the alienation of almost all their lands and other resources during the first sixty years of organised British settlement Maori became impoverished and eked out a subsistence living until well into the second half of the twentieth century when migration to urban areas provided the majority of Maori with wage labour but resulted in further alienations from their lands, language and cultural heritage. This was a pattern of colonisation very similar to indigenous peoples in Australia, Canada, The United States and much of Latin America. Since 1985, after nearly 150 years of Maori protest and civil disobedience, successive New Zealand governments have sought to settle historic claims made by Maori against illegal and unconscionable alienation of their lands, fisheries and other property. Over 1000 claims have been filed for losses incurred, acknowledged to be valued at more than $NZ80 billion. In 1994 parliament set a maximum of a $NZ1 billion to settle all historic claims, $600 million of which has already been paid to the dozen or so tribes that have accepted settlements. Settlements invariably involve an apology from the Crown, the return to tribal ownership of miniscule amounts of government surplus land and a monetary payment. In return tribes are expected to pledge continued allegiance to the Crown and accept the settlement as full and final. Monetary reparations, averaging about one percent of property lost through Crown breaches, while restoring some dignity (mana) to the tribes, are mere acknowledgements of successive parliaments’ discriminatory actions against them. Despite expectations to the contrary from both government and claimants, redress is inadequate for restoring wealth and improving the social and economic status of Maori in New Zealand society. Neither are settlements popular with the wider (mainly Anglo-Celtic) electorate who continually pressure politicians to curtail claims and settlements. This paper will consider the expectations, outcomes, advantages and limitations of settlement for the Crown, Maori claimants and other New Zealand citizens; the consequences of claim settlement delays to those tribes whose claims have yet to be investigated or settled, alternative development assistance and the wider prospect of Maori (and other Pacific peoples) being trapped in poverty as an easily identified but rapidly growing ethnic sub-class."
View the Full Paper

AUTHOR: Jack Dunham
TITLE: Statutory Definitions Of Value - Definitions Of Value - Valuation Of Land Act Valuation Of Land Act State Of Victoria State Of Victoria
View the Full Paper

AUTHOR: Craig Ellis, Patrick J. Wilson And Ralf Zurbruegg
TITLE: Real Estate ‘Value’ Stocks And International Diversification
ABSTRACT: "In recent years there has been an increased interest in the extent to which managers can improve their property portfolio position through international diversification. Much of this research interest has centred around the use of various statistical/econometric tests of time varying correlations and long run equilibrium positions using whole of country property indices. In this article we effectively adopt a short-run ‘tactical asset allocation’ approach to securitised property only international diversification. Using neural network methodology we build a neural network model that `learns’ well established rules of portfolio investment using a set of individual property companies across three of the most highly securitised property markets in the world viz. the United States, the United Kingdom and Australia. We ask the model to compare portfolios constructed purely from domestic assets with portfolios constructed from internationally held assets allowing for foreign exchange adjustments. When the foreign exchange risk is actively managed the outcomes from the analysis suggest that the gains from hedging are conditional on both the return to the unhedged position and the volatility of the underlying currency being hedged."
View the Full Paper

AUTHOR: Dr Chris Eves
TITLE: Planned Residential Community Developments: Do They Add Value? |Refereed|
KEYWORDS: "Residential property, housing developments, planned estates, investment performance, Sydney residential market, community housing projects"
ABSTRACT: "Sustainable development in the major cities of the world have focussed on the combination of good planning and meeting the overall needs of the community and the ability for property developers to maintain profitability. In many countries, these objectives have been achieved in relation to planned residential community benefits, which encompass all planning requirements and the subsequent residential land or houses being sold, however what is not always considered is any reduction or increase in value that could result from the development of planned residential developments. This paper will examine the long term capital return investment performance of residential property in planned, themed and gated residential housing developments compared to the investment return for housing in adjoining residential areas that have not been based on an overall planning basis. The study will determine if the residential market is prepared to pay a premium to purchase in a planned residential estate and if this premium is maintained over time or reverts to the average return for that particular area. A number of planned residential estates throughout the City of Sydney will be used as the basis of the study and will include both freestanding residential developments and planned community medium density unit developments"
View the Full Paper

AUTHOR: Dr Chris Eves
TITLE: Residential Sales By Auction: A Property Type Or Geographic Consideration
KEYWORDS: "Residential property, house sales, auction sales, private treaty sales, socio-economic influences, residential property sectors."
ABSTRACT: "The sale of residential property by auction is a preferred sale method by real estate agents, but not always preferred by some vendors and most residential property buyers. In many residential property markets, the performance and measure of residential property market activity is based on the number of properties offered for sale by auction, auction clearance rates and the number of properties sold prior to auction. However, in many specific residential property markets, sale by auction may not be the preferred or supported method of sale. This paper will review the type of residential property sale within the Sydney residential property market and track the auction sales and clearance rates for Sydney over the past 5 months and compare these results in relation to clearance rates, passed in sales, and properties sold prior to auction This will provide a breakdown of real estate agency sale practice over a large metropolitan region to determine the impact of geographic location and socio-economic factors on the auction of residential property. In addition the paper will analyse the weekly auction sales in the Sydney residential property market to determine what areas of Sydney have the greatest number of house auctions and the performance of the auctions in relation location and socio economic factors. "
View the Full Paper

AUTHOR: Evan Gamby And Amanda Lynn
TITLE: Pushing The Boundaries An Exploration Of The Role Of E-Commerce In The Evolution Of Property Management |Refereed|
KEYWORDS: "manager, intermediaries, e-commerce, exapt, adaptation, evolution"
ABSTRACT: "Although previous academic research has gained insight into the effects of e-commerce on real estate intermediaries such as realtors and mortgage brokers; research that provides insight into the effects of e-commerce on professional property managers, or contributes to property management theory and practice, is scarce. The purpose of this paper is to initiate an exploration of the role of the professional property manager, in a world dominated by e-commerce. Through a review of relevant literature, qualitative research involving property management professionals based in New Zealand (NZ), and a quantitative analysis of a selection of NZ property management web sites this paper will present a contemporary perspective on the evolutionary relationship between e-commerce technology and professional property management in NZ. The findings challenge resource-based disintermediation hypotheses, providing support for developmental and evolutionary theories; provide insight into the future of property management, and the role of knowledge management in that future; suggest foci for future research, and advocates the development of a New Zealand property investor database that can be accessed by all property academics, who choose to conduct research that has applied value to the property sector. "
View the Full Paper

AUTHOR: Gary Garner
TITLE: The Inter-Relationship Between Housing And Health Outcomes |Refereed|
KEYWORDS: housing; health; housing tenure; house design; infrastructure; tenure; house design; indigenous; non-indigenous; property economics; town planning
ABSTRACT: "It is widely acknowledged that a strong relationship exists between environment and human physical condition, with living conditions in particular contributing to the health and well being of particular population groups. More specifically, various research conducted throughout Australia and elsewhere has concluded that there are strong linkages between housing and health. For example, Currie and Carapetis (2000) infer that poor health is directly linked to poor housing and housing infrastructure. People with unmet housing needs tend to be socio-economically disadvantaged, and experience higher death rates, poor health, and are more likely to have serious chronic illnesses . Evidence suggests strong linkages between poor housing and infrastructure, and subsequent impact on health. However, whilst much of the research conducted has found statistical associations existing between housing aspects (tenure, dwelling quality and type, home and location) and health outcomes, there has been little investigation into determining how the various aspects relate to one another for particular population groups. Further, commonalities that may exist between both indigenous and non-indigenous communities have implications for improved planning especially in the area of public housing assistance. This paper provides an in depth commentary on the literature and in particular the key health issues related to housing. More importantly, it endeavours to research specifically in an Australian context enabling a comparison and determination of the real drivers and relationships that exist between several groups – the indigenous community, and selected sectors of the non-indigenous population. It will therefore cut across several disciplines including property economics, town planning, engineering and medicine. "
View the Full Paper

AUTHOR: Ge, X. J., Poon, K. M. And Boon, J.
TITLE: Factors Associated With The Recovery Of Housing Prices In Hong Kong |Refereed|
KEYWORDS: "housing prices, multiple regression models, 2-stage least square, Hong Kong"
ABSTRACT: "In the period 1999 – 2004 housing prices in Hong Kong sunk to a low point in mid 2003 and then rose again. This paper investigates which factors are associated with those price movements. The paper starts by reviewing literature on housing prices including both price determinants and research methodology. Data published by the Hong Kong Government is used for the study. The housing price variables are grouped together as macro economic factors, demographic factors, housing related factors and housing supply factors. The 2-Stage Least Square (2SLS) Method of regression analysis is used in order to reduce the bi-direction effects between dependent and independent variables. Results show that economic conditions are the most important external influencers of housing prices. The model developed can be used to predict the trend of housing prices. "
View the Full Paper

AUTHOR: Bob Hargreaves And Song Shi
TITLE: A Total Returns Index For Investor Housing In New Zealand |Refereed|
ABSTRACT: "A total returns index for investor housing was developed by utilising the Quotable Value New Zealand house price index and the Department of Building and Housing rental series. Survey information was then used to establish the relationship between gross rents and net income. The index was tested for sensitivity and correlation analysis used to compare the returns between cites. Analysis of the data showed that over the last decade rental yields have continued to decline but total returns have increased due to the appreciation in house prices. Regional total returns showed variability with higher yields from slower growing areas being insufficient to offset lower yields from faster growing areas. Negative correlations in the total returns between some cities were identified, suggesting there are opportunities for investors to maintain returns and reduce risk by diversifying their property portfolios. A spreadsheet optimiser was utilised to allocate assets under a variety of scenarios. "
View the Full Paper

AUTHOR: Dr Carolyn Hayles
TITLE: An Examination Of The Relationship Between Sustainability And Affordability In Residential Housing Markets |Refereed|
KEYWORDS: "Affordability, energy efficiency, sustainability measures, through life costs"
ABSTRACT: "To be affordable, a house must be designed and constructed to last; an approach to building that embraces sustainability principles. Energy efficient construction is proven to reduce the long-term costs of owning a house; it also improves building durability by decreasing the probability of moisture-related problems. When homeowners spend less on energy bills, they can better budget for maintenance and repair costs, which will again ensure that their house has longevity. While energy efficiency may modestly increase the up front construction costs, it will ensure that a house built today demonstrates value and will be affordable in the future. Every new house built in the state of Victoria, Australia is now required to gain a 5 Star energy rating for building fabric and water saving fixtures. It is unsure whether these measures will lead to the culture change required in the house building industry, namely an increase in housing affordability and a reduction in environmental impact. A study of the ‘entry level’ residential housing market in the State of Victoria prompted a review of mandatory and voluntary sustainability measures for house builders; as well as resources made available to purchasers regarding sustainability, particularly energy efficiency and water resourcefulness. Resources from Australia, New Zealand, North America, and UK are presented in order to provide some international comparisons. This paper discusses the relationship between affordability and sustainability and questions whether affordability, predominantly related to reducing the through life cost of owning a home (sustainable energy and water-efficient measures in particular), is going to be driven by legislation, the market or the consumer. "
View the Full Paper

AUTHOR: Carolyn S Hayles, Kathryn Robson And Sarah E Holdsworth
TITLE: A Case Study From Rmit: Introducing Property Undergraduates To The Immediate Issues Of Housing Sustainability And Affordability Within Australia And New Zealand |Refereed|
KEYWORDS: "Affordability, best practice, housing, sustainability, self-directed learning"
ABSTRACT: "Sustainable housing is about creating a better quality of life for home owners now, and importantly, in the future. Sustainable housing approaches take into consideration building design including orientation and fabric, as well as energy and water efficiency measures to improve the running of the home with least detriment to the environment. Sustainable housing is also concerned with the long term cost of running that home, in other words its affordability up front and down the line. Housing sustainability and affordability are inextricably linked and it is not possible to teach one without covering the other. Energy efficient construction, as an example, will reduce the long term costs of owning a house as it not only increases the lifespan of the building fabric but it reduces the cost of heating and cooling that house. This paper describes a new approach to teaching sustainability (and thus affordability) to undergraduate property and construction students at RMIT University, an approach which asks the students to think critically and work out for themselves appropriate approaches to tackling these issues. Students who elect to study housing sustainability and affordability participate in a study tour where they are given an opportunity to consider examples of housing initiatives both in Australia and New Zealand, and can experience, at first hand, the complexities of planning and designing for sustainability and affordability. In addition to site visits, the students take part in workshops where practitioners share their skills and experience. Embedded within the curricula is the concept that sustainability requires an ethical position to be developed by both educator and student. Students must complete an assignment to demonstrate an understanding both in wider sustainability and affordability issues as well as looking at best practice in housing development now. They are asked to produce house plans for a specific location taking into consideration issues that may impact on sustainability performance and long term affordability of that house. To complete the course, students are invited to present, in an open forum, the key challenges they experienced in planning for sustainability and critically explore whether, in their opinion, housing sustainability must be driven by the house builder or the consumer. It is hoped that this hands-on approach will mean students are better equipped to tackle complex issues in their own professional practice."
View the Full Paper

AUTHOR: M J Hefferan
TITLE: Changing Demand For Office Accommodation By Contemporary Knowledge-Intensive Firms
View the Full Paper

AUTHOR: Dr. David M. Higgins
TITLE: Positioning Commercial Property In The Australian Investment Market |Refereed|
KEYWORDS: "Australian investment market, statistical analysis, commercial property"
ABSTRACT: "Commercial property is an important investment asset class that can cover the four quadrants of the Australian investment market – debt/equity and private/public markets. On available data, the extent and composition of property within these sectors can be measured and compared to the wider Australian investment market. As at December 2004, the estimated size of the overall Australian investment market is AU$5.8 trillion of which Australian commercial property component represents AU$206 billion (4%). Of this amount the private commercial property sector comprises just over 55% and is distributed between debt AU$59 billion (28%) and equity AU$57 billion (27%) market. The publicly traded market (Listed Property Trusts) represents the largest component at AU$82 billion (40%). In separating the equity, commercial property and securitised debt components, the size of the Australian investment market for these asset classes can be compared to the global equivalent. The total value of the global investment market is AU$122 trillion, and is apportioned equities (35%), debt securities (61%) and commercial property (4%). The Australian market share is 2% of the global investment market, although the percentages range across the different investment sub-markets. The Australian commercial property market accounts for 3% of the global property market as there is a significant proportion of Australian investment grade property already owned by institutions."
View the Full Paper

AUTHOR: Philip Kimmet
TITLE: Theoretical Foundations For Integrating Sustainability In Property Investment Appraisal
KEYWORDS: "Sustainability, psychic income, property investment appraisal, social and environmental capital, transaction costs, property rights, externalities, governance, partnerships"
ABSTRACT: "A good deal of research undertaken recently confirms that sustainable construction has net-positive cost–benefits. However, this is not flowing through to real estate valuation practices. Indeed, valuers appear to be ‘locked-in’ to traditional ideas about what creates value, meaning that costly innovative design features aimed at reducing resource inputs and enhancing efficiencies are often discounted. This is proving to be a major deterrent to sustainability investment. Increasingly though, there is evidence to suggest that sustainability initiatives actually enhance value, or at the very least are value-neutral. This is explained as the accumulation of environmental and social capital being transferred into asset worth, and understood in this paper as ‘psychic income’. It is argued here for a number of reasons that psychic income should not be assessed as an extra variable, as has been inferred by recent efforts grappling with the problem of valuing sustainability in real estate assets. The question then is how do we account for the added value, which results from sustainability efforts, of such things as reputation enhancement, the preservation of a more natural environment, productivity gains and increases in well-being? This paper looks to transaction cost and property rights literature for answers, and makes the case for an ‘integrated approach’ to property investment appraisal. Psychic income is clearly an increasing factor in property-related contracting, but it takes time and learning for it to be accepted as an integrated part of the asking price. The sooner these two elements are factored in to negotiations, the earlier that psychic income will be represented as a premium and agreed to by contracting parties, and by implication, the faster sustainability investment will take-off. "
View the Full Paper

AUTHOR: Dr. Rohit Kishore
TITLE: Theory Of Behavioural Finance And Its Application To Property Market: A Change In Paradigm
KEYWORDS: "Behavioural Finance, Market Efficiency, Limits to Arbitrage, Prospect Theory, Investor Psychology and Investor Behaviour. "
ABSTRACT: "Behavioural finance is part of finance that seeks to understand and explain the systematic financial market implications of psychological decision processes. It utilises knowledge of cognitive psychology, social sciences and anthropology to explain irrational investor behaviour that is not being captured by the traditional rational based models. This paper analyses the development of behavioural finance, reviews stock market and property market behavioural literature and identifies issues in the property market that can be better understood and explained using behavioural models. "
View the Full Paper

AUTHOR: Rob Kooymans And Paul Haylock
TITLE: Post Occupancy Evaluation And Workplace Productivity |Refereed|
KEYWORDS: Post Occupancy Evaluation; Productivity; Workplace Design; Workplace Culture
ABSTRACT: "Post Occupancy Evaluation (POE) involves the systematic evaluation of user satisfaction with the facilities provided, usually in respect of users’ work environment. POE traditionally concentrates on the built environment itself rather than concurrent changes to work process and work culture, which frequently help to drive the changes to the built environment. POE tends to assume that productivity improvements will automatically flow from built environment improvements, with benefits being couched in terms such as “benefits to the organisation through improved design decisions and resultant better quality buildings”; “human benefits through avoidance of problems that are obstacles to the effectiveness and enjoyment of workplaces”; “professional benefits through professionals making better-informed design decisions”. The traditional focus seems to be on user appreciation of the design professionals’ efforts, rather than on the, arguably more important, achievement of the organisation’s productivity goals. This POE study of four newly-altered branches of a financial institution was conducted by researchers familiar both with changes to the built environment and desired changes to work processes and work culture. The study sought to find the links from built environment, work process and work culture change to productivity, as well as to staff satisfaction. The results indicate that the design intent to create branches that have a focus of providing more value added services achieved its productivity goals. The results of improvements in measures of workplace culture, such as staff having a sense of belonging and a feeling of empowerment were more equivocal."
View the Full Paper

AUTHOR: Peter Koulizos
TITLE: Property Education: How Should It Be Taught?
KEYWORDS: "property education, curriculum design, teaching methodology"
ABSTRACT: "Property education has been the topic of some debate over the years. From general discussions on course curriculum and assessment through to specific issues such as problem based learning and field trips. The motivation behind this research was the findings of a recent Graduate Careers Council of Australia (GCCA) survey, which showed the quality of property education, as perceived by the students, was below that of other related disciplines. The aim of the research is to gather views of the stakeholders in property education so as to improve the standard of property education. The main stakeholders i.e. students, academic staff and industry were surveyed on the following broad topics: ? curriculum design ? delivery ? assessment Issues that were addressed under the heading of curriculum design included; degree of input from each stakeholder, problem based curriculum, student centred v industry centred curriculum, mentoring and work experience. The delivery component of the questionnaire asked opinions on field trips, online delivery, case studies and size of lectures and tutorials. Finally, the assessment section explored the importance of exams, individual and group assignments and research papers. The findings have implications for both the universities and the property industry."
View the Full Paper

AUTHOR: Valerie Kupke
TITLE: Bench Marking Creativity
KEYWORDS: "creative class, innovation, economic growth"
ABSTRACT: "Richard Florida in his two best selling books, The Rise of the Creative Class (2002) and The Flight of the Creative Class (2004) proposed a new paradigm for economic growth based on the concept that city and regional economic growth is aligned to specific demographic characteristics. These characteristics are recognised as a form of social or creative capital and are considered necessary for the innovation required to promote economic growth for instance in the high technology sector. Creative capital theory states that where creative people live the economy grows faster – which is to say that jobs follow people. And the creative class makes their city choices based on “What’s there?” “Who’s there?” and “What’s going on?” Governments, including the South Australian government, have been keen to incorporate the notion of a creative index into their strategic planning as a means of bench marking their ability to attract industry and increase high technology opportunities. This paper will examine what is meant by the “creative class” and attempt as an exploratory exercise to identify any relationship between an index measuring creativity with economic and social indicators for the sixty five economic regions in Australia. "
View the Full Paper

AUTHOR: Peddy, Pi-Ying, Lai And Dominique Fischer
TITLE: Artificial Neural Networks And Computer Assisted Mass Appraisal
KEYWORDS: "artificial neural network (ANN), Computer Mass Appraisal"
ABSTRACT: "Artificial Neural Networks still have a limited application in CAMA setting. The reasons are partly (and wrongly) due to ‘econometric’ concerns, and partly (and justifiably) due to ‘political’ concerns. This article suggests that ANN could be used more widely and extended to data-poor environments. This article has two objectives: 1) To illustrate one application of ANN to the Taipei residential market by the method of back-propagation. The study is based on 5528 sales and 11315 auction sales of homes in Taipei city and Taipei County. 2) To briefly illustrate – on Taipei markets again - how satisfactory results can also be obtained in an ‘information’ poor environment;"
View the Full Paper

AUTHOR: Chyi Lin Lee, Jon Robinson And Richard Reed
TITLE: An Exploration Of The Relationship Between Size And Risk In A Downside Risk Framework Applied To Malaysian Property Shares
KEYWORDS: "systematic downside risk, unsystematic downside risk, size, property shares"
ABSTRACT: "The relationship between size and risk (systematic and unsystematic risk) has received considerable attention in recent literature. However, these studies employ variance as the risk measure, which the appropriateness for using this risk measure is always questioned by researchers and practitioners due to its underlying strict assumptions. Therefore, there is crucial to adopt an alternative risk measure for ascertaining the relationships. The aim of the study is to examine the relationships between size and systematic downside risk and unsystematic downside risk in line with the theoretical sound of this risk measure. The empirical evidences reveal that the size is strongly correlated with unsystematic downside risk. While, there is a weak inverse relationship between size and systematic downside risk."
View the Full Paper

AUTHOR: Ying Li And Seow Eng Ong
TITLE: Market Timing Behavior Of The Secondary Equity Offerings Of Reits |Refereed|
ABSTRACT: "In corporate finance literature, the concept of market timing means that managers would make their equity finance decisions according to the conditions of the capital market. REITs are special investment vehicles and are not included in the studies of general stocks. Thus the question is: do REITs have the same market timing behavior in their secondary equity offerings like general stocks? In this study, we would use the secondary equity issues data of US equity REITs to analyze the market timing behavior of REITs. We are trying to learn about the short-run and long-run performance of REITs around equity issues, to find out the market timing pattern of REITs SEOs. Our findings could help us understand the meanings behind the equity issuing decisions of REITs managers, and help investors make appropriate reaction to these signals. Our results show some evidence of the market timing behavior under the asymmetric information hypothesis. However, compared to general stocks, the timing behavior is less obvious for REITs. With regard to the long-run performance, no long-run underperformance is found after REITs SEOs. These results have two implications. First, although REITs are comparatively transparent than industrial firms, the REITs managers still have the market timing abilities to utilize the market conditions. Asymmetric information and adverse selection still exits for REITs, although the timing behavior is less obvious for REITs compared to general stocks. Second, the absence of long-run return anomaly after SEOs of REITs means that the market efficiency is not violated."
View the Full Paper

AUTHOR: Tzu-Chin Lin And Chi-Mei Lin
TITLE: Assessing Land And Structure Values In A Mass-Appraisal Framework
ABSTRACT: "The assessed value of a real property is supposed to serve as an accurate indication of its corresponding market value. If property value is not properly assessed, the advantages of value-based policies, such as property tax and eminent domain, will be lost and land uses will consequently be distorted. Samples of 10,191 residential properties transacted between January 1999 and June 2004 in Taipei City are thoroughly examined. Assessment ratio study finds no significant assessment regressivity or progressivity. The assessment ratios between houses, apartments and high-rise apartments, however, are found to be significantly different. As a result, owners of different types of properties but at the same market price are treated differently. Spatial consideration is explicitly added into this study. A potential clustering of lis with similar assessment ratios is identified. This non-random pattern infers assessment inequity in a spatial sense. Another recognized clustering of inaccurately assessed properties suggests that the assessment errors shall be related to certain socio-economic factors that vary over space."
View the Full Paper

AUTHOR: Lin, Tzu-Chin
TITLE: Price Prediction For Residential Properties Consistent With Sales Comparison Approach
KEYWORDS: grid-adjustment; nearest neighbor method; sales comparison approach
ABSTRACT: "Sales comparison approach is frequently used in property appraisal. It, however, involves judgments on several matters and is criticised as subjective and heavily dependent upon experience. Regression method provides a more objective way of estimating values of property attributes. Nevertheless, comparable selections and weights allocation remain absent. The nearest neighbor method explicitly incorporates grid-adjustment process with the regression method, and thus retains the essence of sales comparison approach. We apply the nearest neighbor method to predicting prices of residential properties in Taipei City. The nearest neighbor method does not outperform the regression method in our study. We, however, believe that the information revealed through the nearest neighbor will be of great benefit to appraisers in justifying their judgments."
View the Full Paper

AUTHOR: Anna-Liisa Lindholm And Karen M. Gibler
TITLE: Measuring The Added Value Of Corporate Real Estate Management
KEYWORDS: "Added Value, Core Business, Real Estate Strategy, Performance Measurement"
ABSTRACT: "Corporate real estate management (CREM) performance needs to be measured and monitored so as to ensure the match between a company’s business and real estate strategies. Performance measures used in CREM should be identified based on the company’s core business goals instead of using traditional accounting measures focusing mainly on cost reductions or capital minimization. The aim of the paper is to use a multidisciplinary approach and empirical research results to develop a balanced set of key performance indicators to evaluate how corporate real estate directly and indirectly adds value to the company’s bottom line financial results. The empirical results are based on interviews with corporate real estate executives and service providers. Based on a model developed in previous research and the results from interviews, we prepare a proposed set of key performance indicators tied to real estate strategies presented in the framework. "
View the Full Paper

AUTHOR: Stellan Lundstrom And Christina Gustafsson
TITLE: Valuation Variation – Result From A Repeated Experiment
KEYWORDS: "Uncertainty, valuation experiment, accounting, financial reporting"
ABSTRACT: The discussion about valuation accuracy and variations in valuation has been given new fuel when new worldwide accounting standards with a strong emphasis on market value are implemented. The most far- reaching new rule is that changes during the year in market value should affect both the income statement and balance sheet. This new accounting standard is currently implemented for Swedish listed real estate companies and has led to a strong focus on valuation variation and valuation accuracy as well as the magnitude of the property cycle. A general discussion about uncertainty in valuations is illustrated with results from a repeated valuation experiment that give an indication about the magnitude of variation in estimated market values as well as variation in individual discounted cash flow parameters. The variation in market value estimates is found to be much dependent on the special market situation with fast escalating rents in Stockholm CBD during the late 1990s and a more stable situation in the year 2005. The results from the experiments are discussed in relation to results from other studies and implications are drawn for valuation as well as for accounting and portfolio management.
View the Full Paper

AUTHOR: Kf Man And Kw Chau
TITLE: Is The Existence Of Property Cycles Consistent With The Efficient Market Hypothesis?
KEYWORDS: "Property Cycle, Efficient Market Hypothesis, Behavioural Finance"
ABSTRACT: "A number of empirical studies have confirmed the existence of property cycles in various mature real estate markets. In this paper, we will see whether these results fit in with the existing relevant theories. The efficient Market Hypothesis (EMH) is one of the cornerstones of the mainstream finance. In the context of the equity market, one of the generally accepted implications of the EMH is the future price of a security is unpredictable. The real estate market, by various empirical studies, has found to be weak form efficient. It is thus natural to infer that no property cycle exists as otherwise it would imply the predictability of property price and that is not consistent with EMH. This study, after reviewing the up-to-date literature, found the Efficient Market Hypothesis has taken on a new face; it is separated from the Random Walk Hypothesis (RWH). Due to its infallibility in empirical testing, it could well be recessed to the role of benchmarking the relative efficiency of the market. The apparent inconsistency between the existence of property cycles and EMH therefore disappears. The behavioural school of finance proclaims that market may not be efficient all the time and provides an explanation for this. Under this school of thought, the apparent conflict between the existence of property cycles and EMH again disappears. "
View the Full Paper

AUTHOR: Kf Man, Angel Ng
TITLE: An Empirical Analysis Of Valuation Accuracy And Variation – Hong Kong Evidence
KEYWORDS: "Valuation accuracy, valuation variation"
ABSTRACT: "Being active players in the real estate market, valuers and their valuations play an important role in the pricing decisions used for real property transactions. In this study, we shall examine empirically the accuracy of the valuations produced by valuers in a particular situation: the auctioning of vacant land by the Hong Kong Government for development purposes. Previous studies on valuation accuracy dealt with investment properties only. Data for the analysis is taken from public records. Regression analysis is employed to analyze the data. We found that both public and private sector valuers consistently produced valuations that differed from the actual transacted prices, with the private sector valuers performing better. Amongst the private sector valuers, the variation in estimation of values relative to the transaction price falls outside a 20% band seventy percent of the time, due to the high volatility of the market during the sample period "
View the Full Paper

AUTHOR: Mangioni
TITLE: Valuing The Purchase Price Of Property – Is The Purchase Price Of Property The Best Evidence Of Value? |Refereed|
KEYWORDS: "valuation, sales evidence, market value"
ABSTRACT: "The role of the valuer in undertaking a valuation is to determine the value of the property being valued. In the case of mortgage valuations, where the purchaser has agreed and exchanged contracts on a property, it may be presumed that the role of the valuer is to confirm or reject the purchase price as value. In the case of rejecting the purchase price as value, the market value is determined by the valuer. In the competitive mortgage market there is pressure on the valuer that suggests the purchase price of property is ultimately the best evidence of value. This paper firstly determines the purpose of the mortgage valuation given the proposition that the purchase price of property is the best evidence of value. Secondly cases have been reviewed that have presumably endorsed the proposition that the purchase price of a property is the best evidence of value. An examination of these cases will define the criteria valuers are to use to establish whether the purchase price of property is the best evidence of value. An examination of cases involving the refinancing of property where there is no sale over the subject property, coupled with an absence of comparable sales evidence has been undertaken, in establishing the importance of sales evidence in the valuation process."
View the Full Paper

AUTHOR: Graeme Newell And John Macfarlane
TITLE: The Accuracy Of Property Forecasting In Australia
KEYWORDS: "Property forecasting, API property sentiment survey, forecast versus actual performance, accuracy, optimistic forecasts, naïve property forecasting strategies."
ABSTRACT: "Property forecasting is an important component within a property investment strategy. Using the Australian Property Institute’s “Australian Property Directions Survey”, this six-monthly survey amongst independent property forecasters in Australia is used to compare property forecasts with actual property performance to assess the accuracy of property forecasting in Australia over 1999-2005. The accuracy of this property forecasting is also benchmarked against a number of alternative naive property forecasting strategies to assess the “added-value” of property forecasting in Australia."
View the Full Paper

AUTHOR: Graeme Newell And Hsu Wen Peng
TITLE: The Significance Of Emerging Property Sectors In Property Portfolios
KEYWORDS: "Emerging property sectors, property portfolios, property vehicles, self-storage, healthcare, retirement facilities, leisure/entertainment, emerging sector performance index, performance analysis."
ABSTRACT: "Property funds in Australia have over $160 billion in assets, with office, retail and industrial property being the major property sectors contributing to these property portfolios. However, recent years have seen increased attention given to the property investment opportunities available from the emerging property sectors such as self-storage, healthcare, retirement facilities and leisure/entertainment. This paper will assess the significance of these emerging property sectors in property portfolios in Australia; particularly highlighting issues such as the current portfolio levels and the leading property funds in these emerging property sectors. An emerging sector LPT performance index is established and an emerging property sector risk-adjusted performance analysis carried out over 2002-2005, as well as the portfolio diversification benefits of the emerging property sector assessed."
View the Full Paper

AUTHOR: Graeme Newell
TITLE: The Significance Of Property In Industry-Based Superannuation Funds In Australia
KEYWORDS: "Superannuation, industry-based superannuation funds, asset allocation, property, property investment strategy, future expectations"
ABSTRACT: "Superannuation funds in Australia currently have over $740 billion in assets, with compulsory superannuation having a continued strong impact on funds flowing into this sector. Within the superannuation sector, industry-based superannuation funds make a significant contribution. The purpose of this paper is to review the industry-based superannuation funds in Australia; particularly focusing on the significance of property in these superannuation funds. Issues to be assessed include the strategic contributions by direct and indirect property, use of property investment vehicles, property investment strategies and future expectations for property in industry-based superannuation funds in Australia."
View the Full Paper

AUTHOR: Claire Roberts And Vivienne Spurge
TITLE: A Comparative Study Of Broadband Technology In Rural Areas: The Availability And Use By Small Office Occupiers And The Effectiveness Of Use For E-Commerce.
View the Full Paper

AUTHOR: Peter Rossini And Paul Kershaw
TITLE: Developing A Weekly Residential Price Index Using The Sales Price Appraisal Ratio |Refereed|
KEYWORDS: "House Price Index, SPAR index, Hedonic Indices"
ABSTRACT: "In July 2004 the Reserve Bank of Australia published an influential paper discussing issues relating to the longitudinal measurement of housing prices. In that paper it was suggested that residential house price indices were fraught with problems including timeliness, sample selection bias and a failure to deal with changes in quality. This paper reports research that uses a Sales Price Appraisal Ratio (SPAR) technique to develop an index that could be timelier than tradition indices that are released at quarterly intervals. The research compares the results of a monthly SPAR index to other indices based on mean, median and tri-mean prices as well as a hedonic index. The SPAR index is then calculated at a weekly level and compared to the traditional indices calculated at the same level. The research shows that the SPAR index produces very similar results to the hedonic index with less variable results than the mean, median and tri-mean index. The results suggest that the SPAR index would be suitable as a monthly index across a broad region or it would make a usable weekly index across a broad region, and a monthly index at a submarket level. The research also illustrates that a SPAR index may provide a suitable methodology for producing price indices for other land-use types where indices have been traditionally impossible to produce."
View the Full Paper

AUTHOR: Peter Rossini And Paul Kershaw
TITLE: Can A Hybrid Automated Valuation Model Outperform Individually Assessed Capital And Site Values. |Refereed|
KEYWORDS: "Automated Valuation Models, Property Taxation, Mass Appraisal, Residential Valuation, Hybrid Models"
ABSTRACT: "In recent years the use of Hybrid Automated Valuation Models has been widely discussed in the property taxation literature. Such models are now recognised in the IAAO's standard for AVM's. Given recent court decisions in Australia that seem to require valuers to consider sales with improvements when assessing site value in 'thin markets', such models may prove to be a useful tool in mass appraisal. This is particularly relevant following problems with the delivery of acceptable valuations for rating and taxation in several states in Australia. In 2004 a variety of AVM’s were developed for a study area in Adelaide and presented at the 2005 PRRES conference. That research showed that a single model could produce capital and site values of a similar average accuracy to the actual assessed values that were created using multiple computer assisted valuation (CAV) models at the small sub-market level. This paper extends the research, by improving the models using the outcomes from the previous research but also by applying a wide range of tests. Assessments based on a large number of small models may lead to assessment bias and an abnormal distribution of assessment ratios typically evidenced by low relative valuations for high priced properties. In this research various measures from the IAAO standards on ratio studies are adopted as the tools to assess the performance. In particular the A/S ratios are tested for the level of assessment using mean, median, weighted mean and geometric mean and for variability using the coefficient of dispersion (COD),coefficient of variation (COD) and quartile ranges whilst reliability is tested using confidence intervals and vertical inequities with the price related differential (PRD) and normality with the Shapiro- Wilk test. The Mann-Whitney test is used to check for sales chasing and reliability between the model and hold-out data."
View the Full Paper

AUTHOR: M. Badri Rozali And A. Husni Hamzah
TITLE: The Performance Of Listed Property Trusts In Malaysia: An Empirical Investigation
KEYWORDS: "Listed property trusts, Risk-adjusted performance, Systematic risk "
ABSTRACT: "This empirical study investigates the performance and systematic risk of listed property trusts in Malaysia for the 1995 to 2005 periods. The study is further analyzed according to sub-periods of the Malaysian economic cycle, namely pre-crisis, during crisis and post-crisis. The market portfolio benchmarks employed are the Kuala Lumpur Composite Index (KLCI) and the Kuala Lumpur Properties Index (KLPI). The objectives of this study are: (1) to examine the degree of returns based on risk-adjusted performance measures, specifically the Adjusted Sharpe Index, Treynor Index and Adjusted Jensen Alpha Index, of listed property trusts throughout the long-term period and in each sub-period respectively; (2) to investigate the degree of systematic risks, measured by beta, of listed property trusts throughout the long-term period and in each sub-period respectively; and (3) to determine whether the listed property trusts give higher returns than the KLCI and KLPI respectively. The results indicate that the risk-adjusted performance of the listed property trusts varied over the study period. The Adjusted Sharpe Index and Treynor Index measures show that the listed property trusts in general outperformed the market portfolios during the crisis but underperformed in the pre-crisis and post-crisis periods. Similarly, the Adjusted Jensen Alpha Index reveals that the listed property trusts on average generated better performance than the market portfolios during crisis but recorded poorer performance in the pre-crisis and post-crisis periods. This study also found that average systematic risks of the listed property trusts were slightly higher than the market portfolios during the pre-crisis and crisis but were significantly lower in the post-crisis period. "
View the Full Paper

AUTHOR: Ian Scarman And Rob Kooymans
TITLE: Australian Federal Government Property Sales 1996-2001- Issues That Won’T Go Away |Refereed|
KEYWORDS: Government Assets; Sale and Leaseback; Cost of Capital; Risk
ABSTRACT: "The current (conservative) Australian Federal Government, first elected in 1996, sold almost $1bn worth of government-owned real property assets, mainly public servant-occupied office buildings, in the years from 1996 to 2001. Many of these properties were sold on a sale-and leaseback basis, with secure, long term (15 years or more), Federal Government occupancy leases attached. The financial logic of the sales was the subject of considerable debate at the time; a subsequent Australian National Audit Office report was very critical of both the logic and effectiveness of the process. The case highlights three critical financial and economic issues that have great import for both government asset sales and public private partnerships, namely: • The rules to be applied to the making of decisions to either retain or dispose of government owned and used assets, or to either fund new asset developments from borrowings or enter public private partnerships – i.e. to fund public assets from government borrowing or private borrowing • The calculation of governments’ cost of capital relative to that of the private sector and • The impact of the riskiness of the assets themselves and their various revenue streams on the discount rate used in the hold/sell decision The research involved: a literature search of the relevant financial and economic theories underpinning these issues; a search of the available documentation on Australian Federal Government asset sales including, where possible, reading of the original sources referenced within that documentation; interviews with some of the participants at various levels in either the government asset sales from 1996 to 2001 or in the subsequent inquiries into those sales. The findings of the research were that there is little or no credible theoretical or empirical support for the assumptions underlying the decisions to sell and lease back the assets in question."
View the Full Paper

AUTHOR: John Sheehan
TITLE: Flawed Property Rights: The Aftermath Of Colonialism
KEYWORDS: "Natural resources, post colonial legacy, property rights"
ABSTRACT: "Whilst economic and social systems across the world continue to flex to the demands of globalisation, the legacies of previously dominant models similarly impinge upon existing systems of land tenure. Whilst some may consider the primary legacy of British colonisation to be the common law, a less generous interpretation of that legacy could be a pervasive, but flawed, paradigm of property rights in natural resources. Property rights in former colonies in both the developed and developing world increasingly evidence fundamental structural flaws from the standpoint of property theory.It is evident that an emerging array of property rights is now crystallising in natural resources such as water, biota (flora and fauna), carbon and saline credits, electromagnetic spectrum, and even in previously settled rights such as land and minerals. In many countries, as a consequence of their colonial history, such flawed property rights are inhibiting the development of regimes of titling, management and trading to the detriment of the sustainable use of various natural resources. This paper canvasses natural resources management issues now emerging through this post colonial legacy in countries such as Ethiopia, Namibia, South Africa, New Zealand and Australia. Ironically, the impact of international business investment in non-common law countries such as Thailand and China is now revealing similar property rights issues ordinarily rooted in postcolonial legacies. "
View the Full Paper

AUTHOR: Jenny Shellard, Ric Lombardo And John Flaherty
TITLE: Modelling Dimensions Of Height And View At Melbourne’S Docklands
KEYWORDS: "hedonic regression modelling, value of height and view, isolating value attributes, valuation of apartment buildings."
ABSTRACT: "This study employs a large database of pooled data on transaction prices and associated apartment attributes to estimate a number of competing hedonic price equations with the end objective of isolating the separate contributions of height, view and apartment building on the value of high rise apartments in the Melbourne Docklands Apartments Precinct."
View the Full Paper

AUTHOR: Song Shi
TITLE: Total Returns Analysis For The Auckland And Wellington Apartment Markets
KEYWORDS: "Apartment, returns index, yields, Auckland, Wellington"
ABSTRACT: "This research was carried out to ascertain the total returns being achieved by investors in the Auckland and Wellington apartment markets. Apartment sale data and apartment rental information were utilised to calculate gross returns. To calculate net returns a mail questionnaire was generated and sent directly to the apartment owners. By applying the weighted repeated-sales (WRS) method, the author found that the apartment values tended to lag housing prices in an upward market and were more volatile than the same period housing market. Net rental yields continued on a downward trend over the last 3 years, with increases in apartment prices and decreases in apartment rents. Total returns from investing in apartments are lower than the returns made from investing in residential housing since the higher income return has been offset by lower capital appreciation."
View the Full Paper

TITLE: Myopia And Methodology In Property Economics
KEYWORDS: "Methodology in property economics, metaphysics, Aristotle, classical sciences"
ABSTRACT: The methodological implications of the interaction between general economics and property economics is explored. It is argued that property economists have uncritically adopted a methodological position from general economics that is problematic. The ideal relationship between the two disciplines is for property economics to contribute to the parent discipline in areas that it has expertise and experience. These include issues regarding the economics of property and the appropriateness of quantitative methodology. Shortcomings in the understanding of methodology in property economics are considered
View the Full Paper

AUTHOR: Daniela Spirkova And Koloman Ivanicka
TITLE: 15 Years Of Real Estate Markets In Visegrad Countries And Beyond |Refereed|
KEYWORDS: "housing market, real estate market, housing development, commercial real estate, FDI, economic incentives"
ABSTRACT: "The paper deals with the development of the real estate markets in the Visegrad countries with the emphasis on Slovakia after the year 1990. The characteristic features of the period were the massive privatization including the bank institutions, introduction of the important institutional changes, and the creation of the prerequisites for the proper functioning of the real estate markets. The important impulses for the development of the real estate markets were the substantial foreign direct investments in Visegrad countries, implementation of radical economic reforms and European Union enlargement. The impact of these changes is shown in more detail in commercial and housing property areas. At the end of the paper the changes of the real estate markets in Visegrad countries are summarized and future tendencies briefly outlined."
View the Full Paper

AUTHOR: Simon Stevenson And Tony Mcgough
TITLE: Exploring The Intra-Metropolitan Dynamics Of The London Office Market
ABSTRACT: This paper explores the relationships between key sub-markets in the Central London office market. The paper models the intra-metropolitan dynamics and examines how sub-markets influence and impact upon one another. Set within a rent adjustment framework the modelling approach highlights the key linkages and allows a broader examination of the overall dynamics of the London office market. The results highlight the position of the West End as the prime submarket within Central London and also the impact of the development of the Docklands submarket on the Central London office market.
View the Full Paper

AUTHOR: C. Susilawati And L. Armitage
TITLE: Housing Organisations In Australia And The Netherlands: A Comparative Analysis |Refereed|
KEYWORDS: "Affordable rental housing, housing association, community housing, Australia, the Netherlands"
ABSTRACT: "Dutch housing associations are private organisations with a public responsibility which are managed effectively to fulfil the social objectives of providing affordable rental housing. In the Australian system, community housing organisations are categorised as not-for-profit organisations and are mostly characterised by small organisations with very limited resources. This study aims to identify the strengths and weaknesses of the Australian and the Dutch housing association models. A series of interviews with representatives of community housing organisations in Brisbane, Australia, will be compared with the results of similar interviews with representatives of social housing associations in the Netherlands. In addition to differences in management structure, the second principal variation is that of government financial involvement: in the Dutch system, a social housing guarantee is provided by the state government, which reduces the risk of borrowing and, hence, the interest rate accordingly. Furthermore, the encouragement of mixed-housing types in the Netherlands avoids an undesirable concentration of low cost housing in one locality as well as allowing residents to have more housing options and continue to live in the same neighbourhood throughout their life. Adapting the highly subsidised Dutch housing model to fit the Australian context is an opportunity considered in this paper."
View the Full Paper

AUTHOR: Susilawati, Connie And Lin, Vickey Chiu-Chin
TITLE: Case Analysis Of Auction Market In Brisbane Housing System |Refereed|
KEYWORDS: "Auction Residential House, Auction Mechanism, Housing System, Brisbane "
ABSTRACT: "Only recently, the average Australian residential property market was experiencing negative growth caused by the decrease of average housing prices in the major capital cities, in particular, Sydney and Melbourne. However, other cities were registering positive growth. In a decade, the average house price in Brisbane has increased by more than 150 per cent. In 1994, the highest average house price in Brisbane was around $310,000 but in 2004 it reached $780,000. The high appreciation expectation has also influenced the choice of housing transaction method. In a boom market, auction in Sydney and Melbourne contribute a certain level of residential property market share. In Sydney, there was 50 per cent of all real estate sold by auction marketing. During the same boom period, the Brisbane auction market only had 20 to 30 per cent market share. This initial study aims to explore Brisbane housing auction market and the risk/benefit analysis to stakeholders in the auction mechanism. This study analyses the results from in-depth interview of representative of stakeholders and recent sales data (mid August to early October 2005). It was also found that vendors gain more benefits than buyers in the auction market. However, the strict terms of conditions that apply in auction transactions relative to the private treaty sales have discouraged buyers from utilising the auction process. "
View the Full Paper

AUTHOR: Hao Tan Rae Weston And Yiming Tang
TITLE: Applying The Miles And Snow’S Business Strategy Typology To China’S Real Estate Development Industry: A Research Framework |Refereed|
KEYWORDS: "Business strategy; Real estate developer; China, Strategic choice, Resource-based view"
ABSTRACT: "Strategy typologies have been widely employed to describe various business strategies within a given industry. However, few studies have applied this useful tool to China’s real estate industry. In this paper we examine business strategies of Chinese developers based on the strategy typology developed by Miles and Snow (Prospector-Analyzer-Defender-Reactor). In light of the classic SWOT framework, we examine the external and internal influences/constraints to the firms’ business strategy formulations by adopting two perspectives, i.e. the strategic choice and the resource-based view, in order to identify the antecedents of the business strategy types. Factors such as ‘perceived political/regulatory environmental uncertainty’, ‘guanxi with the local government’ and ‘market-linking and marketing capabilities’ are suggested as significant predictors of business strategies of Chinese real estate developers and five research hypotheses are proposed. The paper aims to contribute to a better understanding on China’s real estate market in general, and of the developers’ strategy making behaviors in particular."
View the Full Paper

AUTHOR: Stephen Thode
TITLE: On The Appraisal Of Residential Properties Near Undesirable Land Uses |Refereed|
KEYWORDS: "Undesirable land uses, Stigma, Appraisal, Estimating economic harm, LULU"
ABSTRACT: "An increasingly common appraisal assignment is to determine the impact of local, undesirable land uses (LULUs) on nearby housing prices. The appraiser given such an assignment faces many challenges including: a determination of the stigma zone; the selection of appropriate comparables sales for the subject property; and, whether other, co-located undesirable land uses may also affect the subject property’s value. This article proposes several methodologies for refining and improving estimates of the housing price effects of undesirable land uses, especially in those areas where multiple LULUs exist. When more than one undesirable land use may contribute to a negative house price effect, the article emphasizes the need to establish the relative contribution of each land use to the overall price effect."
View the Full Paper

AUTHOR: Ting Kien Hwa
TITLE: Corporate Real Estate Holding And Impact On Firm Returns |Refereed|
KEYWORDS: "corporate real estate, pricing, share returns, Fama-MacBeth approach"
ABSTRACT: "This paper examines whether corporate real estate of non-property companies affects share returns by using the two-stage Fama-MacBeth approach. The study period is from 1993 to 2001 with a sample of 83 non-property companies listed on Bursa Malaysia. The corporate real estate proxies are obtained from financial statements and are represented by book value of property, first difference in annual book value, property to total tangible asset ratios and property to shareholders’ equity. The pricing is examined in terms of corporate real estate holdings/intensities, by period, year, industry sectors, portfolio and by contemporaneous and lagged property proxies. The use of contemporaneous and lagged property proxies is able to capture better the impact of corporate real estate holdings on share returns. Overall the results of the study show that corporate real estate has a weak effect on stock returns. "
View the Full Paper

AUTHOR: Ting Kien Hwa, Annuar Md Nassir, Graeme Newell And Taufiq Hassan
TITLE: Wealth Effects Of Corporate Real Estate Disposals: Impact Of The Asian Financial Crisis |Refereed|
KEYWORDS: "Corporate real estate, disposals, event study"
ABSTRACT: This study examines the stock price reactions to the announcements of corporate real estate disposals by listed non-property companies in Malaysia and whether disposals under different economic conditions lead to different price reactions. The results show that the cumulative abnormal returns associated with the property disposals differ significantly in different economic conditions. Price reaction for property disposals before the Asian financial crisis is consistent with the normal investor expectations of increasing shareholder value. However property disposals during and after the crisis have negative wealth effects. Cross-sectional regressions show that the Asian financial crisis and the relative size of the disposal are significant factors affecting the abnormal returns. The findings extends the literature on corporate real estate disposal by concluding that price reactions is conditional on economic conditions at the time of announcements on property disposals.
View the Full Paper

AUTHOR: Asst. Prof. Dr.Sonthya Vanichvatana
TITLE: Relationship Between Building Characteristics And Rental To Support Serviced Apartment Investment |Refereed|
ABSTRACT: "Apartment and serviced apartment investments in the central business district of Bangkok have been a major attraction in Thailand’s real estate business. Investment decisions usually depend on income from apartment rental, which normally has been determined from demand-supply relationship. Beyond the demand-supply relationship, this paper explores other variables to support capital investment decision on building features. Questions arise on (1) how much luxury investors should spend on building characteristics, amenities and decoration, to attract target clients, and (2) do such investments on building amenities reflect on income in proportion of capital investment, other than apartment location. This study examines the relationship between apartment rent and building amenities, in term of types and quantity of amenities. The aim is to support decision on apartment capital investment. The data explored was collected in 2003 from apartments in central business district of Bangkok. Approximate 271 apartments and serviced apartments projects are collected from eight districts that are grouped into three zones. Building amenities studied consisting of 27 types (including parking, swimming pool, and business centre). The analyses were done in three parts: (1) analysis of frequency ranking of all amenity types, (2) analysis of relationship between amenity types and rents, and (3) regression analysis, test of correlation between rents and types of amenities. The first two Analyses compare amenities among all projects, apartments only, and serviced apartments data sets. To minimize the impact of demand-supply relationship on rent, the test of correlation between rents and types of amenity were done within each zone then compared results among them. The analyses produced interesting results. There are seven types of amenities always on the top frequency ranking in all three sets of data. Analyzing of average rent, based on one-bedroom, reveals that apartments with any type of amenities have average rents lower than average rents of serviced apartments with any type of amenities. Correlations between rents and amenities provided are higher than those between rents and unit size. This result implies that rents are more likely to base on amenities provided rather than unit size. This research reconfirms that rent is driven by amenities provided."
View the Full Paper

AUTHOR: Sara J Wilkinson And Richard G Reed
TITLE: Office Buildings And The Environment – The Increasing Importance Of Esd |Refereed|
KEYWORDS: "Office buildings, ESD, refurbishment, C02 emissions."
ABSTRACT: "The links between the built environment and sustainability issues such as fossil fuel consumption and climate change is clear. In developed countries buildings contribute around half of all carbon dioxide emissions and offer considerable scope for a significant contribution to sustainability through ecologically aware design and increased energy efficiency (BRE, 1996). The Australian commercial stock emits 12% of all greenhouse gas emissions however the commercial property market has some inherent barriers to sustainability (DSE, 2005). A substantial proportion of the stock is owned by institutional investors who are unconvinced by the need to improve their stock and pass on running costs to tenants (Callender & Key, 1997). As capital values are not greatly affected by sustainability, owners react by doing little or nothing and the effect is to limit sustainability related investment and undermine efforts to deliver sustainability in the sector. Furthermore the efficiency of buildings declines over time and whilst energy efficiency is important to new design, the existing stock must be improved if urban built environment greenhouse gas emissions are to be reduced. Much of the property and surveying research has previously adopted an illustrative case study approach advocating the benefits of ESD and energy efficiency in existing buildings. This research adopts a radically different approach and profiles the entire office stock of a global CBD, namely Melbourne, which is seeking to become a carbon neutral city by 2020. The research also employs scenario forecasting to model future changes to the stock over a fifteen year period. This paper sets out the rationale for the research and establishes the methodological approach adopted by the research team."
View the Full Paper

AUTHOR: Wong Siu Kei, Chau Kwong Wing, Yau Yung And Cheung Alex King Chung
TITLE: Floor-Level Premiums In High-Rise And Low-Rise Buildings |Refereed|
KEYWORDS: "Floor level, Building density, Property price, Hedonic price model, Hong Kong"
ABSTRACT: "This paper examines a unique feature of multi-storey buildings – floor-level premiums. Floor-level premiums refer to the price paid for the vertical location of a flat, measured by its floor level. Previous hedonic price studies unequivocally showed that floor-level premiums are positive. However, they were often based on the assumptions that floor-level premiums are constant 1) across different floor levels within the same building and/or 2) across different buildings given the same floor level. This second assumption is particularly interesting because it begs the question of whether the same premium is paid for high-rise and low-rise buildings. For instance, do we pay the same for the 5th floor of a low-rise building and that of a high-rise building? Based on a sample of highly homogeneous buildings (except for their heights), we found that floor-level premiums were not constant but diminishing with respect to floor levels. Moreover, there was no significant difference in the pattern of floor-level premiums between high-rise and low-rise buildings. Finally, there was a positive and significant premium for shorter buildings over taller buildings. "
View the Full Paper

AUTHOR: Hao Wu, Richard Reed, Jon Robinson
TITLE: The 1990S Property Cycle In Hainan |Refereed|
KEYWORDS: Property market; cycle; economic transition; state; Hainan
ABSTRACT: "The continuous debate between the radical and the conservative approaches on which one is more suitable for a successful economic transition seems to be in favour of the latter. With the recent upswing in the property market in Hainan, the review of the 1990s property cycle in Hainan is linked with economic transition in China. A case study approach is used to establish the importance of the 1990s Hainan property cycle to the formation process of the Chinese property market system. The analytical framework is an integration of the theories of property cycles and economic transition, using the conceptual model of typical commercial property markets modified according to the historical settings in Hainan. It is found that the 1990s Hainan property cycle is unique in that the economic transition has been the key driving force. The structural imbalance caused by the equally imbalanced reform process in different sectors in Hainan has been proved an unsuccessful practice. By and large, the 1990s cycle in Hainan lasted for about 10 years and was state-driven. It was considered an experiment conducted by the state in testing the radical approach of economic transition in the property and urban land sectors. It is suggested that current knowledge of emerging commercial property markets, especially their cyclical behaviour, is limited at both theoretical and empirical levels. Evidence from the past 15 years seems to suggest that the structural and investment imbalance in the economic transition was the main cause of the high volatility in the Hainan property market in the 1990s. The emergence of a commercial property market seems to require choosing the right places to start reform with great caution on investment structure and the fundamentals of the real economy. Eventually, it is essential to adopt a systematic view to assess and to make decision in the process of emergence of property cycles, based on the basic demand and supply patterns in a city’s transitional economy. "
View the Full Paper

AUTHOR: Yau, Y., Wong, S.K., Cheung, A.K.C., Chau, K.W. And Ho, D.C.W.
TITLE: An Empirical Study On The Neighbourhood Effect Of Refurbishment |Refereed|
KEYWORDS: "Refurbishment, Apartment properties, Hedonic price model, Urban rehabilitation, Hong Kong"
ABSTRACT: "An important portion of property value comes from property location, which is a function of the quality of surrounding environment (e.g. external views). In a congested living environment like Hong Kong, it is difficult, if not impossible, to have a view unobstructed by buildings. As such, the quality of views is dependent upon the aesthetic quality of surrounding buildings. It is likely that poorly maintained buildings will emit negative visual effects to their immediate neighbourhood. Refurbishing these poor buildings should, therefore, reduce or even counter this negative externality. This study aims to empirically identify the effect of refurbishment on the prices of neighbourhood properties based on an analysis of panel data in Hong Kong. The data consists of property transactions in a large housing estate located in Pokfulam. This estate was chosen because its surrounding buildings underwent refurbishment in 1998. Results show that the refurbishment brought a significant increase in the price of properties facing the refurbished buildings, keeping other things constant. Given the aging building problem in most urban areas, the results pose significant practical implications on building refurbishment and urban rehabilitation as a whole. Developers or property owners may be lured to invest in the refurbishment of adjacent dilapidated properties with a view to a value enhancement of their own properties."
View the Full Paper

AUTHOR: Yiu C.Y., Tang, B.S., Chiang, Y.H. And Choy, L.H.T.
TITLE: Appraisal Bias In Land Premium Valuation |Refereed|
KEYWORDS: "Appraisal Bias, Land Premium, Residual Valuation Method, Heuristic"
ABSTRACT: "Appraisal bias has been intensively studied from two viewpoints, namely, appraisal smoothing and behavioural appraisal. This paper reviews the literature on appraisal bias and presents an empirical finding on land premium valuation bias. Land premium appraisals are analysed because they can help keep the depreciation factor constant and good pairs of transaction price and estimate. Furthermore, these appraisals are collected from the reported estimates in newspapers, which eliminate the client-agent heuristic. Among the 343 appraisals of land premiums for 109 auctions of land in Hong Kong from 1991 to 1999, evidence of an 8% systematic appraisal downward bias was found in appraisers’ estimates against the final bid prices. The result is statistically significant at the 1% level. We put forward three testable hypotheses to explain this phenomenon. They are (1) options-value hypothesis; (2) different-base-of-valuation hypothesis; and (3) heuristic hypothesis. Further empirical studies are required to critically test the three hypotheses."
View the Full Paper

TITLE: The Development Of Reits In Asia
KEYWORDS: "Asian REITs, recent developments, SWOT analysis "
ABSTRACT: "Although the first Asian REIT was established in 2001, the rapid development of REIT markets in Asia has raised capitalisation of around US$30 billion, with 50 REITs listed over 6 countries in Asia (till end of Oct. 2005). In addition, the first Hong Kong REIT, one of the biggest IPO in the world, was successfully launched in November 2005. This huge growth momentum gathered with the eagerly expansion of Australian LPTs has produced a significant growth within the Asia-Pacific region. Using SWOT (strengths, weaknesses, opportunities, and threats) analysis, this paper exams the most recent development of REIT markets in Asia, and contains the study of the major internal and external factors/issues affecting Asian REITs. The framework of SWOT analysis is one of the most effective tools to assess the strategic situation for a market, and most importantly, provide a systematic understanding of the Asian REIT market in both the short and long term. "
View the Full Paper

AUTHOR: Dr Patrick X.W. Zou, Hossein Darvish, And Dr Jinu Kim
TITLE: How Do Students View Group Assignments In Real Estate And Property Development Studies? |Refereed|
KEYWORDS: "Real Estate Education, Group Assignment, Teamwork Skill, Assessment."
ABSTRACT: "It is generally accepted that group assignment tasks provide many benefits to postgraduate real estate students. Consequently, group assignments have become common place in university education. However students often have problems understanding group assignments, which may not be considered by lecturers when designing assessment tasks. This research aims to understand how postgraduate real estate students view group assignments in terms of the benefits they perceive and the problems they have experienced, as well as how group assignments can be improved. The results show that the benefits of group assignments are closely linked to teamwork skills such as: cooperation, communication, interpersonal, negotiation, and delegation while the main problems were ‘different expectation and low quality work done by some members’. It is concluded that while group assignments are important and provide opportunities for students to learn course contents, share ideas, and develop teamwork skills, to avoid problems from arising in group assignment, it is necessary to establish a detail assessment criteria that provides the process and progression monitoring, recognize individual contribution and the final submissions. At the end, the students’ preference was the combination of group and individual assignments."
View the Full Paper

AUTHOR: Dr Patrick. X.W. Zou, Dr Guomin Zhang And Professor Jia-Yuan Wang
TITLE: Identifying Key Risks In Construction Projects: Life Cycle And Stakeholder Perspectives |Refereed|
KEYWORDS: "risk, risk management, construction projects, life cycle, stakeholders perspectives"
ABSTRACT: "Managing risks in construction projects has been recognised as a very important management process in order to achieve the project objectives in terms of time, cost, quality, safety and environmental sustainability. However, until now most research has focused on some aspects of construction risk management rather than using a systematic and holistic approach to identify risks and analyse the likelihood of occurrence and impacts of these risks. This paper aims to identify and analyse the risks associated with the development of construction projects from project stakeholder and life cycle perspectives. Postal questionnaire surveys were used to collect data. Based on a comprehensive assessment of the likelihood of occurrence and their impacts on the project objectives, this paper identifies twenty major risk factors. This research found that these risks are mainly related to (in ranking) contractors, clients and designers, with few related to government bodies, subcontractors/suppliers and external issues. Among them, “tight project schedule” is recognised to influence all project objectives maximally, whereas “design variations”, “excessive approval procedures in administrative government departments”, “high performance/quality expectation”, “unsuitable construction program planning”, as well as “variations of construction program” are deemed to impact at least four aspects of project objectives. This research also found that these risks spread through the whole project life cycle and many risks occur at more than one phase, with the construction stage as the most risky phase, followed by the feasibility stage. It is concluded that clients, designers and government bodies must work cooperatively from the feasibility phase onwards to address potential risks in time, and contractors and subcontractors with robust construction and management knowledge must be employed early to make sound preparation for carrying out safe, efficient and quality construction activities"
View the Full Paper