IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Simulating Hong Kong’s Office Leasing Market via System Dynamics Modeling

Listed author(s):
  • Eddie Chi Man Hui

    ()

    (Department of Building and Real Estate, The Hong Kong Polytechnic University, Kowloon, Hong Kong)

  • Ka Hung Yu

    (Department of Building and Real Estate, The Hong Kong Polytechnic University, Kowloon, Hong Kong)

Registered author(s):

    This study introduces a combined method, on the basis of both system dynamics and econometric modeling, in forecasting the office rental values in Hong Kong. The findings suggest that the office rental values in Hong Kong appear to be more fluctuating when the price level of the office ownership market is comparatively volatile, likely due to the over-reaction of economic trends by the supply side of the property market. It is plausible to say development lags and adjustment cost, under the current land policies in Hong Kong, are the main attributes behind this phenomenon. In order to reduce the volatility on the office market, the government should relax the approval procedures concerning changing land use, and the subsequent rearrangement of premium payment. Further, the current policies on land sales need to be revised, especially concerning the application list system. Those measures could reduce the time required and the transaction cost incurred for the supply side to adjust to the ever-changing demand.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.umac.mo/fba/irer/papers/past/Vol9_pdf/HUI%20and%20YU(23-43).pdf
    File Function: Full text
    Download Restriction: no

    Article provided by Asian Real Estate Society in its journal International Real Estate Review.

    Volume (Year): 9 (2006)
    Issue (Month): 1 ()
    Pages: 23-43

    as
    in new window

    Handle: RePEc:ire:issued:v:09:n:01:2006:p:23-43
    Contact details of provider: Postal:
    Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA

    Web page: http://www.asres.org/

    Order Information: Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
    Web: http://www.asres.org/ Email:


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. John S. Hekman, 1985. "Rental Price Adjustment and Investment in the Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(1), pages 32-47.
    2. Hendershott, Patric H., 1996. "Rental Adjustment and Valuation in Overbuilt Markets: Evidence from the Sydney Office Market," Journal of Urban Economics, Elsevier, vol. 39(1), pages 51-67, January.
    3. Marie Howland & David S. Wessel, 1994. "Projecting Suburban Office Space Demand: Alternative Estimates of Employment in Offices," Journal of Real Estate Research, American Real Estate Society, vol. 9(3), pages 369-390.
    4. S Monk & B J Pearce & C M E Whitehead, 1996. "Land-use planning, land supply, and house prices," Environment and Planning A, Pion Ltd, London, vol. 28(3), pages 495-511, March.
    5. S Monk & B J Pearce & C M E Whitehead, 1996. "Land-Use Planning, Land Supply, and House Prices," Environment and Planning A, , vol. 28(3), pages 495-511, March.
    6. Eamonn D'Arcy & Tony McGough & Sotiris Tsolacos, 1999. "An econometric analysis and forecasts of the office rental cycle in the Dublin area," Journal of Property Research, Taylor & Francis Journals, vol. 16(4), pages 309-321, January.
    7. Wheaton, William C & Torto, Raymond G & Evans, Peter, 1997. "The Cyclic Behavior of the Greater London Office Market," The Journal of Real Estate Finance and Economics, Springer, vol. 15(1), pages 77-92, July.
    8. William C. Wheaton & Raymond G. Torto, 1988. "Vacancy Rates and the Future of Office Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 430-436.
    9. Sterman, John D., 1988. "Modeling the formation of expectations : The history of energy demand forecasts," International Journal of Forecasting, Elsevier, vol. 4(2), pages 243-259.
    10. Waldo L. Born & Stephen A. Pyhrr, 1994. "Real Estate Valuation: The Effect of Market and Property Cycles," Journal of Real Estate Research, American Real Estate Society, vol. 9(4), pages 455-486.
    11. Patric H. Hendershott & Colin M. Lizieri & George A. Matysiak, 1999. "The Workings of the London Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 365-387.
    12. Max Kummerow, 1999. "A System Dynamics Model of Cyclical Office Oversupply," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 233-255.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ire:issued:v:09:n:01:2006:p:23-43. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IRER Secretary Office/Webmaster)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.