Pricing of presale properties with asymmetric information problems

Research output: Journal article publicationJournal articleAcademic researchpeer-review

13 Citations (Scopus)

Abstract

Property developers have increasingly used forward contracts to pre-sell uncompleted properties to enhance their financial viability. However, there are limited researchers exploring the hidden forward risks arising from asymmetric information issues embedded in forward property markets. This study sets up a Forward-Spot Property Index-Tracking (FSIT) model, which is able to capture not only the risks arising from market uncertainty during the construction time-lag and the discount required to compensate for the missing rents within the forward contract period, but also the risk premium imposed on a purchase of a presale property arising from asymmetric information issues.
Original languageEnglish
Pages (from-to)139-152
Number of pages14
JournalJournal of Real Estate Portfolio Management
Volume13
Issue number2
Publication statusPublished - 1 Apr 2007

ASJC Scopus subject areas

  • Management Information Systems
  • Economics, Econometrics and Finance (miscellaneous)

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