S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin), Royal Institute of Technology Working Paper Series, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin), Royal Institute of Technology

No 16/3:
Housing Tenure and Informational Asymmetries

Herman Donner () and Fredrik Kopsch

Abstract: The paradigm shift of focus from rental apartments to owner occupied units on the Swedish property market has led to a substantial number of rental apartments being converted to cooperative apartments. Such conversions typically are done at prices far below market value. This provides a setting with strong financial incentives for tenants involved in such a conversion to take advantage of their informational advantage regarding the financial management of a cooperative, as compared to less informed neighbors and buyers on the general market. This setting also provides a reliable way of estimating the persistence and effects of such an informational asymmetry through nearly 200,000 apartment transactions in Stockholm, Sweden during the period of 2005 to mid-2014. We find strong support towards a behavior concurrent with moral hazard; as such insiders mismanage the cooperatives by setting monthly fees artificially low in order to increase the probability of a conversion as well as apartment values. Lastly, market participants seem to discount this informational asymmetry as recently converted apartments sell at lower prices.

Keywords: Informational Asymmetries; Real Estate; Housing Tenure; (follow links to similar papers)

JEL-Codes: D80; D82; R30; R31; (follow links to similar papers)

23 pages, February 24, 2016

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

record.jsf?dswid=1282&pid ... onlyFullText=false&sf=all    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Herman Donner ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:kthrec:2016_003 This page was generated on 2016-02-24 17:27:51