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What Drives the Property Price-Trading Volume Correlation? Evidence from a Commercial Real Estate Market

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  • Charles Leung

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  • Dandan Feng

Abstract

The significant price-trading volume correlation found in the residential property market presents a challenge to the rational expectation hypothesis. Existing theories account for this fact with either capital market imperfection (down-payment effect or loss-aversion consideration) or imperfect information (search theoretic models). This paper employs data from a commercial real estate market, which face a different degree of severity of capital market constraint than the residential market, and thus provide an indirect but effective test for alternative theories. Policy implications are also discussed. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11146-005-1374-9
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Bibliographic Info

Article provided by Springer in its journal The Journal of Real Estate Finance and Economics.

Volume (Year): 31 (2005)
Issue (Month): 2 (September)
Pages: 241-255

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Handle: RePEc:kap:jrefec:v:31:y:2005:i:2:p:241-255

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Web page: http://www.springerlink.com/link.asp?id=102945

Related research

Keywords: trading volume; housing price; search; capital market imperfection; different degree of severity;

References

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  17. Charles K. Y. Leung & Garion C. K. Lau & Youngman C. F. Leong, 2002. "Testing Alternative Theories of the Property Price-Trading Volume Correlation," Journal of Real Estate Research, American Real Estate Society, American Real Estate Society, vol. 23(3), pages 253-264.
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Citations

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Cited by:
  1. Charles Ka Yui Leung & Jun Zhang, 2011. "¡§Fire Sales¡¨ in Housing Market: Is the House- Search Process Similar to a Theme Park Visit?," International Real Estate Review, Asian Real Estate Society, vol. 14(3), pages 311-329.
  2. Song Shi & Martin Young & Bob Hargreaves, 2010. "House Price-Volume Dynamics: Evidence from 12 Cities in New Zealand," Journal of Real Estate Research, American Real Estate Society, American Real Estate Society, vol. 32(1), pages 75-100.
  3. Charles Ka-Yui Leung & Nan-Kuang Chen, 2005. "Intrinsic Cycles of Land Price: A Simple Model," Departmental Working Papers _166, Chinese University of Hong Kong, Department of Economics.
  4. Akkoyun, H. Cagri & Arslan, Yavuz & Kanik, Birol, 2013. "Housing prices and transaction volume," Journal of Housing Economics, Elsevier, Elsevier, vol. 22(2), pages 119-134.
  5. Sherry Zhefang ZHOU & Helen Xiaohui BAO, 2009. "Modelling Price Dynamics In The Hong Kong Property Market," Theoretical and Empirical Researches in Urban Management, Research Centre in Public Administration and Public Services, Bucharest, Romania, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 4(1S), pages 8-26, April.
  6. de Wit, Erik R. & Englund, Peter & Francke, Marc K., 2013. "Price and transaction volume in the Dutch housing market," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 220-241.
  7. Leung, Charles Ka Yui & Tang, Edward Chi Ho, 2013. "Speculating China economic growth through Hong Kong? Evidence from the stock market IPO and real estate markets," MPRA Paper 46346, University Library of Munich, Germany.
  8. Yong Tu & Seow Ong & Ying Han, 2009. "Turnovers and Housing Price Dynamics: Evidence from Singapore Condominium Market," The Journal of Real Estate Finance and Economics, Springer, Springer, vol. 38(3), pages 254-274, April.
  9. Leung, Charles Ka Yui & Zhang, Jun, 2011. "“Fire Sales” in housing market: is the house-searching process similar to a theme park visit?," MPRA Paper 29127, University Library of Munich, Germany.

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