Improving Information Efficiency in Housing Markets Using Online Listings

Abstract

The prevalence of online listing portals in Singapore after 2013 has transformed transaction activities in housing markets. This paper examines the effects of online listing portals on success rates in sales and performance of real estate agents in the private housing markets in Singapore. By merging the online listing data with the property transaction data, we show three key findings: First, the use of online portals increases the success rate in converting listings into sales; Second, conditional on the success of the sales, real estate agents sell houses at an average premium of 3.26% by adopting online listings relative to using the conventional approach. The premium remains positive and significant at 1.98%, when using a smaller sub-sample of matched property and location attributes; and Third, the adoption of online listings significantly enhances real estate agents' performance in terms of higher price gap and shorter time on the market via the effort, the information (writing style) and the portal selection channels. The online listings reduce frictions in housing market, which is translated into economic benefit of approximately S$1.71 billion (US$1.18 billion).