Apartment foreclosure discount in Kuala Lumpur by Wong, Woei Chyuan, Ng, Pooi Leng, Lee, Janice Y. M., Daud, Md. Nasir

“…With the exception of anecdotal information which suggests that auctioned or foreclosed properties in Malaysia tend to be sold at a deep discount, no study has thus far attempted to quantify this foreclosure discount. This notion is explored by comparing the listing price of auctioned apartments with comparable non-auctioned apartments located within the same building blocks in Kuala Lumpur during the period 2009-2014. …”

Apartment foreclosure discount in Kuala Lumpur by Wong, Woei Chyuan, Ng, Pooi Leng, Lee, Janice Y. M., Daud, Md Nasir

“…With the exception of anecdotal information which suggests that auctioned or foreclosed properties in Malaysia tend to be sold at a deep discount, no study has thus far attempted to quantify this foreclosure discount.This notion is explored by comparing the listing price of auctioned apartments with comparable non-auctioned apartments located within the same building blocks in Kuala Lumpur during the period 2009–2014.The property auction market is predominately relied upon to dispose of foreclosed properties in Malaysia. …”

Estimating the apartment foreclosure discount in Kuala Lumpur by Wong, Woei Chyuan, Daud, Md Nasir, Lee, Janice Y. M., Pooi, Leng Ng

“…This paper examines the price differential between properties traded in the auction market and private negotiated market.With the exception of anecdotal information which suggests that auctioned or foreclosed properties in Malaysia tend to be sold at a deep discount, no study has thus far attempted to quantify this foreclosure discount.We uncover this question by examining listing price of apartment properties in Kuala Lumpur during 2009-2014.For each of the auctioned apartment in our sample, we match it with comparable non-auctioned apartment located in the same building block.This matching strategy essential net out the locational and neighbourhood characteristics of the properties, thus, allowing us to attribute the price differential to the “stigma effect” associated with auctioned or foreclosed properties.We document that auctioned apartments are listed at a discount of 34% as compared to apartments listed in the private negotiated market.…”
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Strategic development of property auctions market in Malaysia by Wong, Woei Chyuan, Lee, Janice Y. M., Daud, Md Nasir, Ng, Pooi Leng, Chan, Wai Seen

“…In comparison to mature markets such as Australia and New Zealand, the auction market in Malaysia is relatively small (0.03% of total property sales) and dominated by distress or foreclosure sales. Outdated laws coupled with an unregulated auction environment have generated myriad challenges among which are the presence of syndicates (dummy bidders) and negative stigma associated with auctions. …”