Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model
The judicial auction is the sole approach to address foreclosed housing in China. Recently, the pervasive devaluation of foreclosed properties in many cities has become an alarming trend, given its potential to trigger a debt crisis in China's housing system. However, scant research has delved...
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| Format: | Article |
| Language: | English |
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Elsevier
2024-03-01
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| Series: | Ain Shams Engineering Journal |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S209044792300388X |
| _version_ | 1797254002861146112 |
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| author | Xingyu Qian |
| author_facet | Xingyu Qian |
| author_sort | Xingyu Qian |
| collection | DOAJ |
| description | The judicial auction is the sole approach to address foreclosed housing in China. Recently, the pervasive devaluation of foreclosed properties in many cities has become an alarming trend, given its potential to trigger a debt crisis in China's housing system. However, scant research has delved into the reasons why foreclosed properties tend to devalue in comparison to second-hand properties under comparable circumstances. This inquiry scrutinizes three types of property-rights risks in judicial auctions, namely cost risk, acquisition risk, and usufruct risk, using the hedonic pricing model. The results indicate that property-rights risks can dampen homebuyers' willingness to pay, as evidenced by the depreciation of the initial auction price. Nonetheless, credible commitments offered by courts can effectively alleviate property-rights risks, particularly for high-risk properties such as small-property-rights housing or illegal housing, whose transactions are heavily reliant on the courts' credibility. |
| first_indexed | 2024-03-09T07:35:41Z |
| format | Article |
| id | doaj.art-d1e9e474f26e4fa490138b7d363344f8 |
| institution | Directory Open Access Journal |
| issn | 2090-4479 |
| language | English |
| last_indexed | 2024-04-24T21:43:02Z |
| publishDate | 2024-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Ain Shams Engineering Journal |
| spelling | doaj.art-d1e9e474f26e4fa490138b7d363344f82024-03-21T05:36:23ZengElsevierAin Shams Engineering Journal2090-44792024-03-01153102499Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing modelXingyu Qian0School of Public Policy and Administration, Chongqing University, 174 Shazheng Street, Shapingba District, Chongqing 400044, ChinaThe judicial auction is the sole approach to address foreclosed housing in China. Recently, the pervasive devaluation of foreclosed properties in many cities has become an alarming trend, given its potential to trigger a debt crisis in China's housing system. However, scant research has delved into the reasons why foreclosed properties tend to devalue in comparison to second-hand properties under comparable circumstances. This inquiry scrutinizes three types of property-rights risks in judicial auctions, namely cost risk, acquisition risk, and usufruct risk, using the hedonic pricing model. The results indicate that property-rights risks can dampen homebuyers' willingness to pay, as evidenced by the depreciation of the initial auction price. Nonetheless, credible commitments offered by courts can effectively alleviate property-rights risks, particularly for high-risk properties such as small-property-rights housing or illegal housing, whose transactions are heavily reliant on the courts' credibility.http://www.sciencedirect.com/science/article/pii/S209044792300388XForeclosed housingJudicial auctionProperty-rights riskAuction priceHedonic model |
| spellingShingle | Xingyu Qian Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model Ain Shams Engineering Journal Foreclosed housing Judicial auction Property-rights risk Auction price Hedonic model |
| title | Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model |
| title_full | Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model |
| title_fullStr | Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model |
| title_full_unstemmed | Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model |
| title_short | Why foreclosed housing devalues in China? An evaluation based on property-rights risks through hedonic pricing model |
| title_sort | why foreclosed housing devalues in china an evaluation based on property rights risks through hedonic pricing model |
| topic | Foreclosed housing Judicial auction Property-rights risk Auction price Hedonic model |
| url | http://www.sciencedirect.com/science/article/pii/S209044792300388X |
| work_keys_str_mv | AT xingyuqian whyforeclosedhousingdevaluesinchinaanevaluationbasedonpropertyrightsrisksthroughhedonicpricingmodel |