Is HOA capitalized in housing price? Evidence from Chongqing, China

Abstract

Purpose

International research has found that Homeowners Association (HOA) is capitalized in housing price in the West. Is that result applicable in Chinese cities? In China there is also widespread applause for HOA. Will that leave trail in the housing market? This paper aims to answer these questions by presenting empirical evidence from 113 private gated communities in Chongqing, China.

Design/methodology/approach

The data set comes from three different sources including a telephone survey. The research methodology includes hedonic models with an endogenous dummy variable of the presence of HOA in a community.

Findings

HOA is not capitalized in housing price.

Research limitations/implications

The empirical finding helps to explain why about 80% of private communities in big Chinese cities have not formed an HOA.

Originality/value

This is the first empirical study on HOA capitalization in housing price in China.

Citation

Deng, F. (2022), "Is HOA capitalized in housing price? Evidence from Chongqing, China", International Journal of Housing Markets and Analysis, Vol. 15 No. 1, pp. 94-107. https://doi.org/10.1108/IJHMA-10-2020-0125