Abstract
There has been copious research work on the development of house price models and the construction of house price indices. However, results in some studies revealed that the accuracy of such indices could be subject to selection bias when using only information from a sample of sold properties to estimate value movements for the entire housing stock. In particular, estimated house price appreciation is usually systematically higher among properties that change hands more frequently. It therefore suggests that the determination of important factors affecting the transaction frequency or intensity of a housing unit should be a more fundamental research question. This paper examines the possible factors that determine the popularity of residential unit by means of a repeated sales pattern. The Poisson regression model and event history analysis techniques are employed to assess the effect of attributes on transaction frequency and intensity. The event history analyses technique can take account of transaction-specific as well as time-dependent covariates, and therefore is recommended for analyzing repeated sales data in a real estate market. All transaction records during the period 1993–2000 from the Land Registry of one of the most popular residential estates in Hong Kong were used to illustrate the method. Unlike a response to favorable transaction price, good quality units do not necessarily inherently display a high transaction frequency. Rather, units of average quality are more likely to be transactionally active.
Similar content being viewed by others
References
Allison, P. D. (1995). Survival Analysis Using the SAS System: A Practical Guide. Cary, NC: SAS Institute Inc.
Bailey, M. J., R. F. Muth, and H. O. Nourse. (1963). \ldA Regression Method for Real Estate Price Index Construction,\rd Journal of the American Statistical Association 58, 933–942.
Belzil, C. (1995). \ldUnemployment-insurance and Unemployment Over Time\3-An Analysis with Event History Data,\rd Review of Economics and Statistics 77, 113–126.
Calhoun, C. A., and Y. H. Deng. (2002). \ldA Dynamic Analysis of Fixed-and Adjustable-rate Mortgage Terminations,\rd Journal of Real Estate Finance and Economics 24, 9–33.
Can, A., and I. Megbolugbe. (1997). \ldSpatial Dependence and House Price Index Construction,\rd Journal of Real Estate Finance and Economics 14, 203–222.
Case, B., H. O. Pollakowski, and S. M. Wachter. (1991). \ldOn Choosing Among House Price-index Methodologies,\rd Journal of the American Real Estate and Urban Economics Association 19, 286–307.
Case, B., H. O. Pollakowski, and S. M. Wachter. (1997). \ldFrequency of Transaction and House Price Modeling,\rd Journal of Real Estate Finance and Economics 14, 173–187.
Chiang, Y. H., and S. Ganesan. (1996). \ldProperty Investment in Hong Kong,\rd Journal of Real Estate Portfolio Management 2, 141–158.
Chou, W. L., and Y. C. Shih. (1995). \ldHong Kong Housing Markets: Overview, Tenure Choice, and Housing Demand,\rd Journal of Real Estate Finance and Economics 10, 7–21.
Clapp, J. M., and C. Giaccotto. (1992a). \ldEstimating Price Indexes for Residential Property\3-A Comparison of Repeat Sales and Assessed Value Methods,\rd Journal of the American Statistical Association 87, 300–306.
Clapp, J. M., and C. Giaccotto. (1992b). \ldRepeat Sales Methodology for Price Trend Estimation: An Evaluation of Sample Selectivity,\rd Journal of Real Estate Finance and Economics 5, 357–374.
Clapp, J. M., and C. Giaccotto. (1998). \ldPrice Indices Based on the Hedonic Repeat-sales Method: Application to the Housing Market,\rd Journal of Real Estate Finance and Economics 16, 5–26.
Clapp, J. M., C. Giaccotto, and D. Tirtiroglu. (1991). \ldHousing Price Indexes Based on All Transactions Compared to Repeat Subsamples,\rd Journal of the American Real Estate and Urban Economics Association 19, 270–285.
Cox, D. R. (1972). \ldRegression Models and Life Tables (with discussion),\rd Journal of the Royal Statistical Society Series B\3-Statistical Methodology 34, 187–220.
Cox, D. R. (1975). \ldPartial Likelihood,\rd Biometrika 62, 269–276.
Dombrow, J., J. R. Knight, and C. F. Sirmans. (1997). \ldAggregation Bias in Repeat-sales Indices,\rd Journal of Real Estate Finance and Economics 14, 75–88.
Englund, P., J. M. Quigley, and C. L. Redfearn. (1999). \ldThe Choice of Methodology for Computing Housing Price Indexes: Comparisons of Temporal Aggregation and Sample Definition,\rd Journal of Real Estate Finance and Economics 19, 91–112.
Firth, D., C. Payne, and J. Payne. (1999). \ldEfficacy of Programmes for the Unemployed: Discrete Time Modelling of Duration Data from a Matched Comparison Study,\rd Journal of the Royal Statistical Society Series A\3-Statistics in Society 162, 111–120.
Fung, K. K., and R. Forrest. (2002). \ldInstitutional Mediation, The Hong Kong Residential Housing Market and the Asian Financial Crisis,\rd Housing Studies 17, 189–207.
Gatzlaff D. H., and D. R. Haurin. (1997). \ldSample Selection Bias and Repeat-sales Index Estimates,\rd Journal of Real Estate Finance and Economics 14, 33–50.
Geltner, D. (1997). \ldBias and Precision of Estimates of Housing Investment Risk Based on Repeat-sales Indices: A Simulation Analysis,\rd Journal of Real Estate Finance and Economics 14, 155–171.
Geltner, D., and W. Goetzmann. (2000). \ldTwo Decades of Commercial Property Returns: A Repeated-measures Regression-based Version of the NCREIF Index,\rd Journal of Real Estate Finance and Economics 21, 5–21.
Goodman, A. C., and T. G. Thibodeau. (1998). \ldDwelling Age Heteroskedasticity in Repeat Sales House Price Equations,\rd Real Estate Economics 26, 151–171.
Iversen, E. S. (2001). \ldSpatially Disaggregated Real Estate Indices,\rd Journal of Business and Economic Statistics 19, 341–357.
Macpherson D. A., and G. S. Sirmans. (2001). \ldNeighborhood Diversity and House-price Appreciation,\rd Journal of Real Estate Finance and Economics 22, 81–97.
McMillen D. P., and J. Dombrow. (2001). \ldA Flexible Fourier Approach to Repeat Sales Price Indexes,\rd Real Estate Economics 29, 207–225.
Meese, R. A., and N. E. Wallace. (1997). \ldThe Construction of Residential Housing Price Indices: A Comparison of Repeat-sales, Hedonic-regression, and Hybrid Approaches,\rd Journal of Real Estate Finance and Economics 14, 51–73.
Mok, H. M. K., P. P. K. Chan, and Y. S. Cho. (1995). \ldA Hedonic Price Model for Private Properties in Hong Kong,\rd Journal of Real Estate Finance and Economics 10, 37–48.
Pavlov, A. D. (2001). \ldCompeting Risks of Mortgage Termination: Who Refinances, Who Moves, and Who Defaults?\rd Journal of Real Estate Finance and Economics 23, 185–211.
Quigley, J. M. (1995). \ldA Simple Hybrid Model for Estimating Real-estate Price Indexes,\rd Journal of Housing Economics 4, 1–12.
Quigley, J. M. (2001). \ldReal Estate and the Asian Crisis,\rd Journal of Housing Economics 10, 129–161.
Ryu, H. K., and D. J. Slottje. (2000). \ldEstimating the Density of Unemployment Duration Based on Contaminated Samples or Small Samples,\rd Journal of Econometrics 95, 131–156.
Steele, M., and R. Goy. (1997). \ldShort Holds, the Distributions of First and Second Sales, and Bias in the Repeat-sales Price Index,\rd Journal of Real Estate Finance and Economics 14, 133–154.
Zabel, J. E. (1999). \ldControlling for Quality in House Price Indices,\rd Journal of Real Estate Finance and Economics 19, 223–241.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Cheung, U.S.L., Yau, K.K.W. & Hui, Y.V. The Effects of Attributes on the Repeat Sales Pattern of Residential Property in Hong Kong. The Journal of Real Estate Finance and Economics 29, 321–339 (2004). https://doi.org/10.1023/B:REAL.0000036676.76741.90
Issue Date:
DOI: https://doi.org/10.1023/B:REAL.0000036676.76741.90