The purpose of this paper is to examine the effect of visual technology on the price discovery process in listings of residential properties in Singapore from 2015 to 2018.
The authors empirically model the effects of 360 virtual tours and drone video on four dimensions in price discovery – buyers’ arrival rate, sale probability, transaction prices and time-on-market – using a comprehensive data set for the residential properties in Singapore.
The analysis shows that the availability of virtual tours or drone video in a listing increases the arrival rate from potential buyers, the probability of a successful sale and the selling price. These findings are consistent with the hypothesis that technologically enhanced tools improve the quality of information and the marketability of property. However, listings with virtual tours tend to be associated with longer marketing time, which is consistent with the prediction of the information overload hypothesis.
This paper extends the housing and price discovery literature by examining how technologically enabled new information affects property transactions.
To the best of the authors’ knowledge, this is the first paper to consider the impact of drone video on property market outcome.
