Regression approach in valuation and analysis for residential and office property in Hong Kong

Pao Yue-kong Library Electronic Theses Database

Regression approach in valuation and analysis for residential and office property in Hong Kong

 

Author: Chow, Tak-tsun
Title: Regression approach in valuation and analysis for residential and office property in Hong Kong
Degree: M.Sc.
Year: 2000
Subject: Residential real estate -- Valuation -- China -- Hong Kong
Office buildings -- Valuation -- China -- Hong Kong
Regression analysis
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Building and Real Estate
Pages: 84, [32] leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1504113
URI: http://theses.lib.polyu.edu.hk/handle/200/1779
Abstract: The most popular valuation approach for single-residential units in Hong Kong is the comparison method. A well-known limitation of this comparison method is that it depends too much on the experience and subjective judgements of the surveyors but with less objectivity. In order to increase the accuracy of the valuation results, a more systematic, scientific and objective method -- Multiple Regression was attempted to see how could it give help for the valuation jobs. A large-scale residential estate - Tai Koo Shing was selected to test the feasibility of the regression method. The final results are satisfactory. Furthermore, most property market analysis papers found in media are too artificial, arbitrary, emotional and paradoxical. The main cause is similar to the limitation of the comparison method that analysts generally base on their subjective judgements to reach their conclusions but lacking substantial supporting evidence. Hence, regression applied in the property market analysis can also provide a more objective answer supported by sufficient statistical evidence. In this study, regression analysis revealed that rental as the first important factor in addition to a second important factor -- Hang Seng Index for the residential sector and the Prime Rate for the office sector had major influence on the price movements. These results can reasonably explain why the current recovery of the prices in residential and office market is still slow because the rebound of rental is still not found. Finally, Auto-Regressive modeling method was used to predict the price trends. The results showed upward trends for both residential and office sectors from the first quarter of 1999 onwards.

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