Property Prices And Speculative Bubbles

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Property Prices And Speculative Bubbles

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Author : Sanjay Kalra
language : en
Publisher:
Release Date : 2000

Property Prices And Speculative Bubbles written by Sanjay Kalra and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Real property categories.

Prices Rents And Rational Speculative Bubbles In The Sydney Housing Market

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Author : Eden Hatzvi
language : en
Publisher:
Release Date : 2009

Prices Rents And Rational Speculative Bubbles In The Sydney Housing Market written by Eden Hatzvi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.

We examine whether asset pricing theory can explain residential property prices. Using quarterly data for Local Government Areas in Sydney from 1991 to 2006, we find little evidence that variations in price: rent ratios anticipate future real rent growth. Instead changes in price: rent ratios apparently reflect changing expectations about future discount factors. Some important geographical differences in the behaviour of property prices across metropolitan Sydney are identified. A significant proportion of the variation in property prices in outer western regions of Sydney is not explained by either rents or discount factors; pointing to a possible role for a speculative bubble.

Speculative Bubbles In Urban Housing Markets In Germany

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Author : Konstantin Arkadʹevič Cholodilin
language : en
Publisher:
Release Date : 2015

Speculative Bubbles In Urban Housing Markets In Germany written by Konstantin Arkadʹevič Cholodilin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

In the light of the unconventional monetary policies conducted by the majority of large central banks around the world, there is an intense debate about their potential impact on the prices of capital assets. Particularly in Germany, skepticism about the sustainability of the recent policy by the European Central Bank is widely spread and concerns about the emergence of a speculative price bubble are raised. However, studies on bubbles in house prices are scarce and provide mixed results. Moreover, the evidence on German property prices is either based on national indices, which are neglecting city-level heterogeneity, or based on a non-representative sample of cities, or refers to a time period that is relatively short. The present study analyzes a comprehensive data set covering 127 large German cities over the last 20 years. Using state-of-the-art methodology we test for speculative bubbles both at a national and at the city level. Furthermore, we apply two new testing approaches: panel data and principal components versions of Chow type explosive root tests. In addition, we use a more precise definition of a speculative bubble: We define price movements as bubbles when explosive growth of prices is not supported by explosive increases of rents. We find evidence for explosive price increases in many cities, especially for newly built housing. However, only in some urban housing markets, prices decouple from their fundamental values as represented by rents. On the national level, no speculative price movements could be detected. Overall, our findings indicate that the threat of a speculative price bubble in the German housing market is moderate. While we find first evidence for speculative bubbles in selected urban markets, our results indicate that the German housing market overall still appears to be in good condition. Only the small market segment of newly built apartments is affected by potentially speculative investment behavior. Indeed, when accumulated over the period 2009-2013, the newly built housing makes up only 2.2% of the housing stock in 2013. Our results are largely in line with the assessment of most housing market analysts who find that the German housing market is quite stable. However, while most discussants argue that there is no need to worry at all, we conclude that decision makers are well advised to have a close eye on the housing market and to keep track of regional market developments. While it is true that unlike in Spain or the United States, the boom in the German housing market is not credit driven on aggregate, this does not necessarily mean that housing lending on the regional level has not increased substantially.

Intrinsic And Rational Speculative Bubbles In The U S Housing Market

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Author : Ogonna Nneji
language : en
Publisher:
Release Date : 2013

Intrinsic And Rational Speculative Bubbles In The U S Housing Market written by Ogonna Nneji and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.

This paper examines the dynamics of the residential property market in the United States between 1960 and 2011. Given the cyclicality and apparent overvaluation of the market over this period, we determine whether deviations of real estate prices from their fundamentals were caused by the existence of two genres of bubbles: intrinsic bubbles and rational speculative bubbles. We find evidence of an intrinsic bubble in the market pre-2000, implying that overreaction to changes in rents contributed to the overvaluation of real estate prices. However, using a regime-switching model, we find evidence of periodically collapsing rational bubbles in the post-2000 market.

Testing For Bubbles In Real Estate Price Cycles

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Author : Chris Brooks
language : en
Publisher:
Release Date : 2004

Testing For Bubbles In Real Estate Price Cycles written by Chris Brooks and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.

This paper investigates whether the prices of UK equity-traded property stocks over the past fifteen years contain evidence of a speculative bubble. Speculative bubbles are generated when investors include the expectation of the future price in their information set. In the presence of speculative bubbles, positive expected bubble returns will lead to increased demand and will thus force prices to diverge from their fundamental value. The present analysis draws upon the methodologies adopted in various studies examining price bubbles in the general stock market. Fundamental values are generated using two models: the dividend discount and the Gordon growth. Variance bounds tests are then applied to test for bubbles in UK property asset prices. Finally, cointegration analysis is conducted to provide further evidence on the presence of bubbles. Evidence of the existence of bubbles is found but these appear to be transitory and concentrated in the mid-to-late 1990s. Investors in property stocks should be aware that in periods when bubbles are present the market does not move on the basis of the fundamentals and abrupt price corrections can occur.

Real Estate In Germany Boom Or Bubble

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Author : Valonita Berisha
language : en
Publisher: GRIN Verlag
Release Date : 2020-03-02

Real Estate In Germany Boom Or Bubble written by Valonita Berisha and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-03-02 with Business & Economics categories.

Bachelor Thesis from the year 2019 in the subject Economics - Macro-economics, general, grade: 1,7, University of Applied Sciences Frankfurt am Main, language: English, abstract: The main question which results through the theme is: “Are German real estates overvalued or can the development on the market be explained by macro-economic factors?” To be able to answer this question it is necessary to firstly define what a bubble is and further analyze general criteria which can lead to it. After that an analyzation of possible indicators which are linked to the two largest housing bubbles: the The Subprime Crisis in in the USA of the former decade and the housing bubble in Japan in the middle of the 90s will be done and a comparison of those crises will be given. Based on those findings the development of the current real estate situation of Germany and an overall evaluation of possible legal and political instruments which are supposed to protect from a pricing bubble will be done. The findings are based on literature review and include an empirical part with expert interviews when it comes to the risk of having a housing bubble specifically in Germany.

Dissertation Analysis Of Speculative Bubbles Within The Chinese Real Estate Market

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Author : Steve Jones
language : en
Publisher:
Release Date : 2020-10-23

Dissertation Analysis Of Speculative Bubbles Within The Chinese Real Estate Market written by Steve Jones and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-10-23 with categories.

The real estate industry has a close relationship with the national economy. As a pillar industry, it effectively stimulates other industry growth and has accelerated housing demand in China notably over the past decade. However, due to multiple factors, the creation of a bubble economy is inevitable within the real estate industry. For example, factors could be the rapid growth of investment portfolios and the increase in residential property price, or an imbalance between market supply and demand which results in the disproportionate structure of the real estate market."the basic intuition is straightforward: if the reason that the price is high today is only because investors believe that the selling price will be high tomorrow-when 'fundamental' factors do not seem to justify such a price-then a bubble exists" (Stiglitz, 1990).This dissertation aims to; (1) Analyse the generation mechanism and driving forces of real estate bubble, (2) Find the degree of the speculative bubble in Chinese market, (3) Investigate the bubble in residential market in Shenzhen, and (4) Obtain the useful suggestions that can be used for the speculative bubble regulation and control.

The First Real Estate Bubble Land Prices And Rents In Medieval England C 1300 1500

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Author : Adrian R. Bell
language : en
Publisher:
Release Date : 2018

The First Real Estate Bubble Land Prices And Rents In Medieval England C 1300 1500 written by Adrian R. Bell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.

This paper tests for speculative bubbles in the medieval English property market based on a unique hand-collected dataset from the feet of fines spanning the fourteenth and fifteenth centuries. We focus on asset types where there are sufficiently large numbers of transactions each year to make a long and reliable run of information, and we transform this into annual time-series of prices. We employ a regime switching model that allows for boom and crash episodes to characterise and test for bubble dynamics. The results are consistent with the presence of periodic, partially collapsing speculative bubbles in the market for agricultural land, but there is no such evidence in the context of messuages. Our findings demonstrate that the medieval English property market shares important features with its contemporary counterpart, for instance with the recent so-called 'barn bubble'

The Great Housing Bubble

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Author : Lawrence Roberts
language : en
Publisher: Monterey Cypress LLC
Release Date : 2008

The Great Housing Bubble written by Lawrence Roberts and has been published by Monterey Cypress LLC this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Art categories.

A detailed analysis of the psychological and mechanical causes of the biggest rally, and subsequent fall, of housing prices ever recorded. Examines the causes of the breathtaking rise in prices and the catastrophic fall that ensued to answer the question on every homeowner's mind: "Why did house prices fall?"--Page 4 of cover

Speculative Price Bubbles In Urban Housing Markets In Germany

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Author : Konstantin A. Kholodilin
language : en
Publisher:
Release Date : 2014

Speculative Price Bubbles In Urban Housing Markets In Germany written by Konstantin A. Kholodilin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.

The surge in the German house prices starting in 2010 raised fears about the emergence of a speculative bubble. Given a local nature of housing markets, it is not clear to what extent the bubble, if any, is spread across different cities. In this paper, we test for speculative house price bubbles in 127 large German cities over the last 20 years. Along with testing bubbles for each city separately, we apply two new testing approaches: a panel data and principal components version of explosive root tests. We define bubble as an explosive growth of prices that is not supported by the rent increase. Therefore, to check for the existence of bubbles, we examine prices, rents, and price-to-rent ratios. We find evidence for explosive price increases in many cities, especially for the case of newly built housing. However, only in few urban housing markets prices decouple from their fundamental values. On the national level, we do not see evidence for speculative price movements. Overall, we find that the danger of a build-up of a speculative price bubble in the German housing market is rather moderate.