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Article: What Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach

TitleWhat Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach
Authors
Keywords3-stage least squares
Bootstrap
Housing rental yield
Leave-one-out cross-validation
Matching estimator
Issue Date2018
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638
Citation
Journal of Real Estate Finance and Economics, 2018, v. 57 n. 3, p. 431-475 How to Cite?
AbstractWe build an on-the-house search model and show that two frequently used metrics for the housing market, the rent-to-price ratio (or rental yield) and the turnover rate, are jointly determined in equilibrium. We, therefore, estimate a simultaneous equations system on matched sale-rental pairs, as a housing unit cannot be owner-occupied and renter-occupied at the same time. We confirm that a higher turnover rate is associated with a lower rental yield. We also identify a form of “dichotomy” in empirical determinants of rental yields and turnover rates at the estate level: the demographic structure and past returns affect an estate’s turnover rate, while popularity, human capital, mortgage burdens, and long-run rent growth determine its rental yield. The robustness of our results is established through a series of tests. Our popularity index for 130 estates in Hong Kong, estate rankings, and the brand premia of major real estate developers may carry independent interests.
Persistent Identifierhttp://hdl.handle.net/10722/262269
ISSN
2020 Impact Factor: 1.479
2020 SCImago Journal Rankings: 0.638
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorHuang, DJ-
dc.contributor.authorLeung, CKY-
dc.contributor.authorTse, CY-
dc.date.accessioned2018-09-28T04:56:21Z-
dc.date.available2018-09-28T04:56:21Z-
dc.date.issued2018-
dc.identifier.citationJournal of Real Estate Finance and Economics, 2018, v. 57 n. 3, p. 431-475-
dc.identifier.issn0895-5638-
dc.identifier.urihttp://hdl.handle.net/10722/262269-
dc.description.abstractWe build an on-the-house search model and show that two frequently used metrics for the housing market, the rent-to-price ratio (or rental yield) and the turnover rate, are jointly determined in equilibrium. We, therefore, estimate a simultaneous equations system on matched sale-rental pairs, as a housing unit cannot be owner-occupied and renter-occupied at the same time. We confirm that a higher turnover rate is associated with a lower rental yield. We also identify a form of “dichotomy” in empirical determinants of rental yields and turnover rates at the estate level: the demographic structure and past returns affect an estate’s turnover rate, while popularity, human capital, mortgage burdens, and long-run rent growth determine its rental yield. The robustness of our results is established through a series of tests. Our popularity index for 130 estates in Hong Kong, estate rankings, and the brand premia of major real estate developers may carry independent interests.-
dc.languageeng-
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638-
dc.relation.ispartofJournal of Real Estate Finance and Economics-
dc.rightsThe final publication is available at Springer via http://dx.doi.org/[insert DOI]-
dc.subject3-stage least squares-
dc.subjectBootstrap-
dc.subjectHousing rental yield-
dc.subjectLeave-one-out cross-validation-
dc.subjectMatching estimator-
dc.titleWhat Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach-
dc.typeArticle-
dc.identifier.emailTse, CY: cytse@hkucc.hku.hk-
dc.identifier.authorityTse, CY=rp01099-
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1007/s11146-017-9647-7-
dc.identifier.scopuseid_2-s2.0-85039556669-
dc.identifier.hkuros292628-
dc.identifier.volume57-
dc.identifier.issue3-
dc.identifier.spage431-
dc.identifier.epage475-
dc.identifier.isiWOS:000443719600005-
dc.publisher.placeUnited States-
dc.identifier.issnl0895-5638-

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