Hedonic Model of the Court Auction Residential Housing Market in the Taipei Metropolitan Area

Abstract

Court auction of real estate in the domestic Residential housing market accounts for a\r\ncertain level of market share. The high returns ratio, due to the fact that the auction\r\nprice is always much lower than the market price, has been the driving force behind\r\nthe entry of investors into the market.\r\nRecently, the emerging real estates auctioned by Taiwan Financial Asset Service\r\nCorp., entrusted by Taipei District Court, and by each bank have prompted still\r\nfurther interest. However, what is the price difference between search and auction\r\nmarkets? What are the factors that affect the winning-bid price of court auction\r\nresidences?\r\nThis study applied the Hedonic Price Theory and found out the relation of the\r\nattributes of court auction residences in Taipei Metropolitan Area from 2001 to 2003.\r\nIn addition, this study also adopted the GIS system to find out which spatial factors\r\naffect the level of the winning-bid price on court auction residences.\r\nThe empirical results confirmed that the market share of court auction housing was\r\nlarger, the bigger the discount ratio between markets was. The percentage 20 pricedifference\r\nbetween the search market and auction market did not exist in 1994, a\r\ndecade ago; however the bigger return was found in 2002 and 2003. The auction\r\nmarket still grows to be the investor or speculator market, it does not belong to the\r\nconsumer’s market.