This research was made possible by funding under the Australian Research Council Linkage Grant scheme and benefited from the contributions made by Vito Mollica, Andrew Lepone, David Johnstone, David Gallagher and seminar participants at the University of Sydney. The authors gratefully acknowledge the comments of two anonymous referees, and the generosity of the Capital Markets Cooperative Research Centre (CMCRC), Rismark International and RP Data for use of their data and resources.
The impact of auctions on residential property prices
Article first published online: 21 FEB 2011
© 2011 The Authors. Accounting and Finance © 2011 AFAANZ
Accounting & Finance
Volume 52, Issue 3, pages 815–830, September 2012
How to Cite
Frino, A., Peat, M. and Wright, D. (2012), The impact of auctions on residential property prices. Accounting & Finance, 52: 815–830. doi: 10.1111/j.1467-629X.2011.00399.x
- Issue published online: 7 SEP 2012
- Article first published online: 21 FEB 2011
- Received 7 December 2009; accepted 25 October 2010 by Robert Faff (Editor).
- Housing markets;
- Hedonic regression;
- Sample selection
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.