Heterogonous Buyers and Housing Transaction Prices

We investigate whether and the extent to which buyer’s characteristics affect housing transaction prices. Using the transaction data of existing apartments from 2014 to 2017 in Guangzhou, China, our results show that buyer’s locality, motivation and financial ability affect the transaction prices. Non-local buyers pay a premium. First-time buyers gain a discount. Experienced repeat buyers for upgrading pay a premium. We also find that buyer’s financial ability affects purchasing power and transaction prices. The buyers paying the acquisition through mortgage gain a higher discount or pay a lower premium than their counterparts paying in cash. Internet using itself won’t affect transaction price. When it is combined with buyer’s other characteristics, the buyers using internet to obtain the property information have information advantage over the ones using tradition method and gain a higher discount or pay a lower premium than their counterparts using traditional method. This finding is important for market participates and regulators to improve information efficiency and transparency through technology.