Property Rights and Housing Value: The Impacts of Political Instability



Political instability may weaken investors' belief in property rights, putting the investors in fear that part of the investment may be wasted due to poor protection. As a result, the investors are unwilling to pay a premium for the security of rights when facing political uncertainty. This article attempts to test the above hypothesis using 10-year freehold and leasehold housing transaction data in Hong Kong and Singapore, where different political scenarios, comparable land lease structures as well as similar property cycles were established during the period. The conceptual model yields testable predictions about our hypotheses, and the empirical results verify the predictions.