Effect of property management on property price: a case study in HK

Abstract

PurposeIt has been said that people's expectation towards their living space has been increased. They have a higher requirement not only for the facilities it provides, but also for the quality of property management services. Property management is now regarded as one of the important considerations of buyers in purchasing a property. This research paper aims to investigate the significance of the quality of property management to property buyers.Design/methodology/approachISO 9001 Certification and HKMA Quality Award (HKMAQA) are used as the measurement of the quality of property management. The paper used a hedonic price model to determine whether there is a relationship between property management and property price and the inference of property management on property price if there is such relationship. Seven private residential estates in Ma On Shan with similar locational characteristics were selected in the research.FindingsThe empirical results show that property management has a significant and positive relationship with property prices. People are willing to pay 4.92 percent and 2.84 percent more on properties managed by a property management company that is ISO 9001‐certified and HKMAQA winner respectively.Research limitations/implicationsThe implications of the results imply that well‐recognized property management increases the value of a property and attracts second‐hand property buyers, and quality property management adds value to properties and hence increases the property price.Originality/valueThe research has contributed an indication of the amount a household would be willing to pay on quality property management services as a reference for investors, users, developers and property management services providers.