The Effects of Visual Technology on Price Discovery for Residential Listings and Transactions

33 Pages Posted: 30 Jun 2021

See all articles by Seow Eng Ong

Seow Eng Ong

National University of Singapore (NUS) - Department of Real Estate

Woei Chyuan Wong

Universiti Utara Malaysia

Davin Wang

Singapore Management University - Lee Kong Chian School of Business

Choon Peng Lai

Grab Holdings Inc

Date Written: January 22, 2021

Abstract

This paper examines the effect of visual technology on the price discovery process in listings of residential properties. We empirically model the effects of 360 virtual tours and drone video on four dimensions in price discovery — buyers’ arrival rate, sale probability, transaction prices and time-on-market — using a comprehensive dataset for the residential properties in Singapore. The analysis shows that the availability of virtual tours or drone video in a listing increases the arrival rate from potential buyers, the probability of a successful sale, and the selling price. These findings are consistent with the hypothesis that technologically enhanced tools improve the quality of information and the marketability of property. However, listings with virtual tours tend to be associated with longer marketing time, which is consistent with the prediction of the information overload hypothesis. This paper extends the housing and price discovery literature by examining how technologically-enabled new information affects property transactions.

Keywords: Visual technology, proptech, drone video, virtual tour, house prices, time-on-market, sales probability, price discovery

JEL Classification: R21

Suggested Citation

Ong, Seow Eng and Wong, Woei Chyuan and Wang, Davin and Lai, Choon Peng, The Effects of Visual Technology on Price Discovery for Residential Listings and Transactions (January 22, 2021). Available at SSRN: https://ssrn.com/abstract=3870236 or http://dx.doi.org/10.2139/ssrn.3870236

Seow Eng Ong

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore
01-65-6516-3552 (Phone)
01-65-6774-8684 (Fax)

Woei Chyuan Wong (Contact Author)

Universiti Utara Malaysia ( email )

Malaysia

Davin Wang

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

Choon Peng Lai

Grab Holdings Inc ( email )

Singapore

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