Factors Affecting Private Domestic Rental Prices in Hong Kong: Example of the Land Auction

Abstract

Most of the previous researchers estimated the influencing factors of the rising private domestic rental prices in Hong Kong without considering the impact of the land auction. By using the intermediaries of housing prices and property market yields, this paper contributes to evaluating how land auctions affect the private domestic rental costs in Hong Kong. As one of Hong Kong's most important methods for land resource allocation, the land auction has been an excellent example to study the housing market. Based on the random-effects models, the results indicate that housing prices and property market yield significantly positively affect rental prices. The results also suggest that the influences vary among different house sizes. Therefore, this research supports that under the influence of overbidding, the land auction has a positive overall effect on the Hong Kong rental prices.