The Impact of Auctions on Residential Property Prices

16 Pages Posted: 9 Sep 2012

See all articles by Alex Frino

Alex Frino

The University of Sydney - Discipline of Finance; Financial Research Network (FIRN)

Maurice Peat

The University of Sydney; Financial Research Network (FIRN)

Danika J. Wright

The University of Sydney - Discipline of Finance

Date Written: September 2012

Abstract

This study assesses whether the sale method in residential real estate markets – auction versus private treaty – is a determinant of sale price. Utilising a larger and richer dataset than previous research, we test for a price effect in auction sales in Sydney and Christchurch. When self‐selection biases are corrected for, using two‐stage hedonic regression analysis and a matched sampling procedure, we find no significant difference between prices of properties sold at auction to those sold by private treaty. This conflicts with the conclusions of previous research in the Australian and New Zealand housing markets, which have documented a price premium associated with auction sales.

Keywords: Housing markets, Auctions, Hedonic regression, Sample selection

JEL Classification: R31, D44, C19

Suggested Citation

Frino, Alex and Peat, Maurice and Wright, Danika J., The Impact of Auctions on Residential Property Prices (September 2012). Accounting & Finance, Vol. 52, Issue 3, pp. 815-830, 2012, Available at SSRN: https://ssrn.com/abstract=2143485 or http://dx.doi.org/10.1111/j.1467-629X.2011.00399.x

Alex Frino (Contact Author)

The University of Sydney - Discipline of Finance ( email )

Futures Research Centre
P.O. Box H58
Sydney NSW
Australia
+61 2 9299 1809 (Phone)
+61 2 9299 1830 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Maurice Peat

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Danika J. Wright

The University of Sydney - Discipline of Finance ( email )

P.O. Box H58
Sydney, NSW 2006
Australia

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