Evaluation of Property Management Agent Performance: A Novel Empirical Model

For many different reasons, property management agents (PMAs) are appointed for managing housing developments in both public and private housing sectors in many different cities. While third-party housing management eases the burdens of property owners and tenants in taking care of their properties, it may lead to agency problems. In fact, cases of mismanagement of multi-owned properties are common in Hong Kong and other Asian cities, leading to accelerated urban decay and augmented confrontations between property owners, users and PMAs. To promote better property management services, the performance of PMAs should be evaluated so market players can benchmark the performance of different PMAs for better-informed decision-making. This study reviews previous and existing measures for evaluating PMA performance and proposes a new evaluation model which is built upon the residual concept proposed by William Sharpe. The ideas underpinning the framework and how a PMA's performance is evaluated using the framework are detailed. Using this new model, 217 housing developments in Hong Kong are studied and the performance of the respective PMAs is evaluated and benchmarked. The evaluation outcomes are validated with the SERVQUAL scores of these 217 housing developments. Practical implications of the research findings follow.