Dynamic and static asking prices in the Sydney housing market

Peyman Khezr and Flavio Menezes

No 538, Discussion Papers Series from University of Queensland, School of Economics

Abstract: This paper investigates the impact of two commonly used asking price strategies on house sales prices. In particular, we compare a dynamic asking price, where the seller adjusts her asking price over time as she fails to sell her property, with a static asking price, where the seller sets an asking price and sticks to it until the property is sold. While this comparison is ambiguous from a theoretical perspective, our empirical study using a comprehensive data set on the properties sold in the greater Sydney region indicates that properties with a dynamic asking price sold, on average, for $25,400 less than properties with a static asking price, which is approximately four percent of the mean property price in our sample. In addition, we also show that, controlling for the asking price strategy, the duration of sale has a significant impact on sales prices.

Keywords: asking price; dynamic pricing; housing market (search for similar items in EconPapers)
JEL-codes: R31 R32 (search for similar items in EconPapers)
Date: 2015-04-14
New Economics Papers: this item is included in nep-ure
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https://economics.uq.edu.au/files/46050/538.pdf (application/pdf)

Related works:
Journal Article: Dynamic and Static Asking Prices in the Sydney Housing Market (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uq2004:538

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