Are Online-Only Real Estate Marketplaces Viable? Evidence from China
Xu, M., Zheng, H. & Wu, J. Are Online-Only Real Estate Marketplaces Viable? Evidence from China. J Real Estate Finan Econ (2022). https://doi.org/10.1007/s11146-022-09924-x
48 Pages Posted: 17 Feb 2021 Last revised: 27 Oct 2022
Date Written: August 24, 2022
Abstract
Online businesses have been surging worldwide during the past decade, especially during the recent COVID-19 epidemic. However, the market share of online real estate transactions is still limited, mainly due to the information-asymmetry problem. In this study, we manually collect data on online judicial housing auctions in China, which is currently the largest online real estate market globally, and investigate how information disclosure facilitates real estate transactions. The empirical results suggest that disclosing better quality information online can attract more potential buyers. In particular, providing more comprehensive information such as professional appraisal reports or videos of the property can help to convert buyers’ initial interests into completed transactions and higher sales proceeds. The positive effects of information are particularly strong when combined with offline services, in a more mature online market, and for low-value properties. We also provide preliminary analysis of factors affecting online-information-disclosure quality from both the macro and micro perspectives. We also provide preliminary analysis of factors affecting online-information-disclosure quality from both the macro and micro perspectives.
Keywords: online business; information; real estate transactions; judicial housing auction
JEL Classification: G14, M37, R31
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