The Impact of Recognized Features of Uncomfortable Houses on Auction Prices: A Chinese Cultural Perspective

Abstract

This study examines the influence of negative Feng-shui features on the prices of foreclosures (the houses subject to court-enforced auction) in Taiwan using the Google Street View function. The research objectives are threefold. Firstly, the study aims to compare whether foreclosed houses with negative Feng-shui features have longer auction times and higher discount rates compared to those without such features. Secondly, it seeks to explore the impact of negative Feng-shui features on investors in the foreclosed house market. Lastly, the study aims to assess the varying degrees of influence of different negative Feng-shui features on foreclosure prices. The findings of this study indicate that in the metropolitan area of Taiwan, foreclosures with more negative Feng-shui features tend to have longer auction times and higher discount rates compared to those without such features. Negative Feng-shui features may cause delays in investor bidding. Among the 12 negative Feng-shui features analyzed, only the presence of “facing-temple” is found to have a negative effect on foreclosure prices. This suggests that foreclosures with the “facing-temple” feature tend to have lower prices and potentially higher discount rates. The other 11 negative Feng-shui features do not have significant effects on auction pricing. This study discovered that the “facing-temple” was a significant negative Feng-shui feature in foreclosures in Taiwan against the traditional perspective. And it provides investors’ concerns toward foreclosures and their tendency in prices of foreclosures in Taiwan.