Residential Property Market Research Articles

Transport Accessibility in a Suburban Zone and Its Influence on the Local Real Estate Market: A Case Study of the Olsztyn Functional Urban Area (Poland)

The development of real estate markets in the vicinity of cities is linked with suburbanization processes. The migration of the population to suburban areas contributes to the growth of the residential property market (houses, apartments and construction plots). To minimize commuting costs, property buyers opt for locations that are situated close to the urban core. This article analyzes construction plots on the local real estate market in the Olsztyn Functional Urban Area, in terms of their temporal accessibility and demographic changes. Spatial variations in population distribution were analyzed with the use of the Gini index and geostatistical interpolation techniques. Spearman’s rank correlation coefficient was calculated to determine the relationships between the analyzed variables. The study revealed differences in the spatial distribution of the population and real estate transactions as well as strong correlations between average transaction price, number of transactions, commuting time and population. The highest number of transactions were observed in cadastral districts situated in the direct vicinity of Olsztyn’s administrative boundaries and the major transportation routes due to their high temporal accessibility.

House Prices and the Credit-Driven Household Demand Channel: The Case of the Irish Economy

The performance of the Irish economy stands out across western economies over the past two decades as the later years of its “Celtic Tiger” phase gave way to a sharp and extremely large economic downturn between 2008 and 2012. This severe recession has been followed by a Lazarus-style economic recovery in recent years. This paper examines the role played by the credit-driven housing net worth channel in the path that Irish economic performance has taken between 2002 and 2019 by specific reference to developments in the domestic labour market. We find a significant positive relationship between housing net worth and employment growth in Ireland, manifesting itself through the non-traded sector of the economy between 2007 and 2012. This followed the emergence and then bursting of a substantial credit-fuelled housing market bubble in the Irish residential property market. Our analysis indicates no evident link between economic activity and a credit-driven housing net worth channel in recent years. This may reflect market and regulatory responses to the banking crisis-led recession of the late 2000s and early 2010s.

A hedonic model of the association between grocery brand provision and residential rental prices in England

PurposeThis study aims to measure the association between local retail grocery provision and private residential rental prices in England. Renting is an important sector of the housing market in England and local grocery provision is an important aspect of service provision and consumers are known to be highly sensitive to the branding of this type of retailing.Design/methodology/approachThis research uses a novel data source from a property rental Web platform to estimate a hedonic model for the rental market. These models incorporate information on the nature of the properties and their neighbourhoods, with an emphasis on how different retail brands are associated with rental prices. This retail brand is captured on two scales: the provision of local branded convenience stores and the provision of larger stores.FindingsThe study finds clear differentials in how the local grocery brand is associated with rental prices. When controlling for commonly explored confounding factors, “Luxury” retailers such as Waitrose and Marks and Spencer are associated with higher rental prices, while “Discounter” retailers are associated with lower rental prices. This finding has many implications, particularly in relation to potential price changes in an already challenging housing market for many people.Research limitations/implicationsThis is an observational study and as such only associations (not causation) can be implied by these findings.Originality/valueThe focus of this research is on the private residential property market, an important market in England but one that has enjoyed less scrutiny than the sales or socially rented markets. Rather than using general accessibility to retail, this research has differentiated the association by the retail brand and store size, two very important aspects of consumer choice.

Citizens and the Florida residential property market: how to return to an insurer of last resort

Developments in 2020 have heightened concerns regarding market disruptions, which could result in increases in Citizens Property Insurance Corporation's (Citizen's) exposure. As a result, Citizens contracted with Florida State University (FSU) to conduct an analysis of Citizens' exposure and identify: 1) opportunities to reduce its exposure; and 2) ways to increase the availability of private market residential property insurance. The FSU study finds that while Citizens has real opportunities to effectively reduce its exposure in the long term, a combination of strategies will be necessary to ensure the adequacy of rates and solvency of private insurers operating in the residential property market. Additionally, several actions must first be taken to improve the attractivenss of the Florida market and increase the capacity of the private market before changes to the structure of Citizens can be made. Finally, the FSU study notes that to achieve Citizens' goal of reducing its exposure, the issue of affordability of homeowners insurance may need to be addressed outside of the insurance process.

The Impact of Gambling Gross Income, Unemployment Rate, Money Supply and CPI on Residential Housing Value in Macau: Theory and Evidence

This paper uses the classical and easy-to-understand Vector Auto-regression Model Method to study the impact of economic and monetary policy variables on the residential property market in Macau. By using sample monthly data from Jan. 2005 to May 2021, the empirical results show the dynamic relationship among the residential property value, key economic and monetary variables. Furthermore, adopting the Granger causality test, generalized impulse response function, variance decomposition and co-integration test of the corresponding VAR specification, the tables and graphs clearly explain the residential housing value has a positive relationship with the gambling gross income; it has a negative relationship with the unemployment rate; it has a positive relationship with the money supply; it has a negative relationship with the consumer price index. Finally, this paper gives five policy actions to help government stabilize the residential property market in Macau and make it healthy develop.

Appraising Trends in Residential Property Investment Returns Relative to Infrastructure Conditions in Ilorin, Nigeria

Infrastructure serves as an indicator to make real estate investment flourish, build the platform for the real estate investment market to thrive, and also to boost returns on property investment. Despite availability of some infrastructure,the property investment market still plagued with less expected returns as a result of non-functionality of neighborhood infrastructure. The study focused on the appraisal of the trends in residential property investment returns between year 2009 to 2018, relative to infrastructure condition in the study area. Data were obtained from practising real estate firms and residents of selected neighborhoods using a structured questionnaire. The study adopted simple random sampling technique. Out of 2,228 questionnaires administered in the selected neighborhoods, in Ilorin, 664 were returned and valid for the analysis. Descriptive mean method of data analysis was employed, coefficient of variation and spearman’s rank-order correlation model was adopted to comparethe property investment return in the selected areas of Ilorin and to determine the infrastructure indexwith benchmark for the minimum acceptable standard condition. Also, Kendall coefficient of concordance was also used to test the relationship among the ranked factors. The result shows that Sabo-Oke and Fate property market of Ilorin performed better than Adewole Housing Estate and GRA (Government Reservation Area) based onrisk-return ratio analysis, of which Sabo-Oke and Fate revealed the most consistent property market returns while GRA and Adewole Housing Estate residential market showed high level market volatility due to risky nature of the market. Sabo-Oke and Fate markets showed a stable market at minimum risk ranges between 8%-36%. The infrastructure condition indices in GRA and Adewole Housing Estate is higher than ideal condition index (Benchmark), ranges between 82%-92% and 81%-94% when compared with the average international standard at 60%, while infrastructure conditions in Sabo-Oke and Fate found a bit below the average international standard condition. The study also found that the performance of residential property investment is magnificent in the area where there is a frequent market transaction with good and functional infrastructure, as it is discovered across the selected neighborhoods in Ilorin. The study concluded that infrastructure have weighty influence on residential property investment returns relative to functional infrastructure and that, residential property market performance hinges on functional infrastructure and it must be given extreme consideration when making a property investment decision.

Estimation of Residential Property Market Price: Comparison of Artificial Neural Networks and Hedonic Pricing Model

The correct real estate property price estimation is significant not only in the real estate market but also in the banking sector for collateral loans and the insurance sector for property insurance. The paper focuses on both traditional and advanced methods for real estate property valuation. Attention is paid to the analysis of the accuracy of valuation models. From traditional methods, a regression model is used for residential property price estimation, which represents the hedonic approach. Modern advanced valuation methods are represented by the artificial neural network, which is one of the soft computing techniques. The results of both methods in residential property market price estimation are compared. The analysis is performed using data on residential properties sold on the real estate market in the city of Nitra in the Slovak Republic. To estimate the residential property prices, artificial neural networks trained with the Levenberg-Marquart learning algorithm, the Bayesian Regularization learning algorithm, and the Scaled Conjugate Gradient learning algorithm, and the regression pricing model are used. Among the constructed neural networks, the best results are achieved with networks trained with the Regularization learning algorithm with two hidden layers. Its performance is compared with the performance of the regression pricing model, and it can state that artificial neural networks can considerably improve prediction accuracy in the estimation of residential property market price. Doi: 10.28991/esj-2020-01250 Full Text: PDF

Residential property market in Malaysia: an analysis of price drivers and co-movements

PurposeThe purpose of this paper is to identify the drivers of residential price as well as the degree co-movement of housing among different states in Malaysia.Design/methodology/approachThis study adopted an advanced econometrics technique: the dynamic autoregressive-distributed lag (DARDL) and – the time-frequency domain approach known as the wavelet coherence test. The DARDL model was applied to identify the cointegrating relationships and the CWT was used to analyze the co-movement and lead–lag relationships among four states’ regional housing prices. The extracted data were mainly on annual basis and comprised macroeconomics and financial factors. Information with regard to residential prices and other variables was extracted from the National Property Information Centre (NAPIC) website, the Central Bank of Malaysia Statistics Report, the Department of Statistics, Malaysia, I-Property.com and the World Bank (WB). The data covered in this study were the pool data from four main states in Malaysia and different categories of residential properties.FindingsThe empirical results indicate that there were long-run cointegration relationships between the housing price and capital gain and loss, rental per square feet, disposable income, inflation, number of marriages, deposit rate, risk premium and loan-to-value (LTV) ratio. While the wavelet analysis shows that (1) in the long run, Kuala Lumpur housing price having strong co-movement with Selangor, Penang and Melaka housing prices except for Johor and (2) the lead–lag relationship also postulates Kuala Lumpur housing price having in-phase category with Selangor, Penang and Melaka housing prices except for Johor.Practical implicationsThis study offers relevant practical implications. First, the study proposes an active collaboration between the private sector and government support which may help to smooth the pricing issue of residential properties. More low-cost residential projects are needed for focus groups including middle- and low-income earners. Furthermore, the results are expected to provide real estate investor in Malaysia, an improved understanding of the regional housing market price dynamics.Originality/valueThe findings of this study were obtained from various reliable sources; therefore, the results reflected the analysis of price drivers and co-movements. Furthermore, findings from this study lend some support to the argument on the rise of residential prices and offer several policy implications from a practical point of view with regard to the residential market.

Problems of modeling the valuation of residential properties

The solution of the housing problem for many decades has been and remains one of the most important tasks facing the nation.. The problem of modeling the value of residential properties is becoming more and more urgent, since a high-quality forecast makes it possible to reduce risks, both for government bodies and for realtors specializing in the purchase and sale of residential properties, as well as for ordinary citizens who buy or sell apartments. Predictive models allow us to get an adequate assessment of both the current and future situation on the residential property market, to identify trends in the cost of housing and the factors influencing these changes. This involves both the qualitative characteristics of the particular property, and the general condition and the dynamics of the real estate market. Russia is characterized by significant differences in the level of development of regions, therefore, by differences in trends of supply and demand prices for real estate. Valuation of residential properties at the regional level is particularly important, since all of the above determines the social and economic importance of this problem. This article presents a comprehensive model for estimating the value of residential properties in the secondary housing market of Moscow using decision tree methods and ordinal logistic regression. A predictive model of the level of housing comfort was built using the CRT decision tree method. The results of this forecast are used as input information for an ordinal logistic regression model for estimating the value of residential properties in the secondary market of Moscow. Testing the model on real data showed the high predictive ability of the model we generated.

One and the Same? A Systematic Literature Review of Residential Property Investor Types

This article presents a systematic literature review on residential property investor types in selected social science disciplines and critically evaluates the status quo of academic engagement within this diverse group of property market actors. A recurring critique in recent years has been the minimal acknowledgment of investor heterogeneity particularly in relation to urban development and the financialization of housing. Yet, to date, there is no systematic evidence supporting these contentions. Therefore, we conducted an exhaustive literature review of residential investment landscapes through the Web of Science citation database in the following fields: Urban and regional planning, geography, sociology, urban studies, public administration, and economics. Subsequently, we methodically searched for the types of investors addressed, and investor categories employed, in journal articles published between 2000 and 2019. Following a meta-categorization of the results, we demonstrate how existing literature differentiates investors in terms of their spatial scale of operation, size and social composition, investment object and finance, or investment and social behavior. Additionally, we highlight the key topics and issues addressed in the reviewed literature within each meta-category. We propose to turn the four meta-categories into a multidimensional analytical framework as a point of departure for a more nuanced and in-depth understanding of investor differentiations, a tool that is urgently needed in Planning Studies and related disciplines. Furthermore, we argue that mixed method approaches combining hard and quantifiable with soft behavioral investor characteristics, as well as institutional analyses combining structural considerations with actors’ agency, are indispensable to disentangle contemporary residential property market dynamics.

Do home purchase limits help? Government policy and housing prices in China

ABSTRACT Facing skyrocketing housing prices, the Chinese government implemented a policy of home purchase limits to maintain stability and sustainability in the residential property market. This paper aims at gauging the causal effect of the home purchase limits policy on housing prices, by replicating a quasi-experimental test with yearly data on 287 Chinese cities from 2007 to 2013. Based on a difference-in-differences matching estimator to control for observed and time-invariant unobserved city heterogeneity, we find that the policy led to decreased housing prices, and the decrease was contingent on the level of enforcement of the policy. The more strictly the policy was enforced, the more the housing prices dropped. Overall, our analyses highlight the importance of government intervention in the property market.

The assessment of house construction situation and investments in housing development in the regions of Volga Federal District

This article is dedicated to the assessment of socioeconomic and house construction situation, as well as investments of local authorities and household sector in the development of housing facilities and infrastructure in Volga Federal District. The situation is described on the example of three regions different in the level of socioeconomic development – the Republic of Tatarstan, Nizhny Novgorod Oblast and Kirov Oblast. Analysis is conducted on such parameters as housing quantity, possibility of residential mortgage, strategies for improvement housing conditions, and planned investment volume in housing on the part of population, etc. The research is based on the analysis of the official statistical data on socioeconomic situation, as well as housing and utilities policy in the regions of Volga Federal District; survey that involved population of three cities – Kazan, Nizhny Novgorod and Kirov (total of 1560 respondents); and expert interview with 25 realtors from the indicated cities. The acquired results allow determining three clusters of the regions in accordance with socioeconomic indexes and characteristics of housing policy: regions-leaders, regions-drivers", and regions-anchors. A more detailed comparative characteristics of the official statistics in three regions – the Republic of Tatarstan, Nizhny Novgorod and Kirov regions, confirmed the results of clusterization. The population polling of the cities of Kazan, Nizhny Novgorod and Kirov complemented the picture with specific details on citizens’ perception of their living conditions and readiness to improve them. Interview with the realtors revealed the typical trends in development of house construction and residential property market in the aforementioned cities.

Selected Aspects of the Residential Property Market in the Context of Creating a City Image (an Example from Rzeszów)

The main goal of the article is to evaluate the city’s real estate sub-product and identify the impact of perception of this urban sphere on the overall image of Rzeszów city among students. A thesis was accepted by the authors that the attractive image of Rzeszów determines the development of the residential real estate market, attracting especially young, educated people to the city. On the basis of a literature analysis of the subject, information obtained from secondary sources on the topic of Rzeszów, as well as surveys carried out in 2018 among students (n = 325), the thesis was confirmed. Thanks to the fast, modern development of the city and consistently implemented marketing activities, Rzeszów is perceived as an innovative city that is friendly to residents, investors and students. This contributes to the inflow of new, usually young, educated residents and investors, which in turn translates into high dynamics in the residential real estate market. Questionnaire surveys carried out among students have shown that they highly appreciate the current image of Rzeszów and, most after graduation, plan to stay in the city which in their opinion is an attractive place for everyday life.

Perspectives of Australian property practitioners on sustainability features in residential property

Information on sustainability features in the Australian residential property market is available but not always shared with buyers by property practitioners (real estate agents, property valuers/appraisers and financiers/mortgage lenders and brokers), as it is not a regulatory requirement. This paper examines the perspectives of property practitioners on a range of sustainability features in residential property. Drawing insights from combined questionnaires and interviews, property practitioners seem to attribute different levels of importance to sustainability related information depending on whether they view the information from their professional perspective or from their clients’ perspective. The results obtained in both 2015 and 2017 confirm that practitioners’ perspectives seem to limit the amount and/or type of information they pass on to their clients. Clients are not considering sustainability features as they may not be aware on the existence of such information and are not informed by practitioners about the value of such information. If practitioners share more complete information within the property market buyers would be able to make more informed purchase decisions regarding energy efficiency, sustainable homes, and reduction in operation costs. The property practitioners themselves can utilise this information to have more targeted and information rich marketing strategies.

Asymmetric framing effects and market familiarity: experimental evidence from the real estate market

ABSTRACTBuying a home may typically be the biggest lifetime purchase of any individual. People looking to purchase a home are bombarded with messages relating to the housing market every day and the framing of these messages has the potential to affect their purchase decisions. To examine these effects, an experiment was carried out with 620 participants who were divided into four groups, each presented with a different message scenario reflecting market familiarity and positive and negative framing. The findings indicate that framing effects are asymmetric in nature and could serve to prolong a housing market downturn within a property cycle. Pessimistic framing was found to lead homebuyers to perceive a more substantial decrease in housing prices, as compared to an optimistic framing which exhibited a significantly lesser increase. The study also suggests that such asymmetry is mitigated when individuals are more familiar with a market. The paper considers the implications of such framing by analysing residential property market data and demonstrates the existence of such asymmetric behaviour and how the market familiarity mitigates such behaviour.

Decision Tree and Boosting Techniques in Artificial Intelligence Based Automated Valuation Models (AI-AVM)

This paper develops an artificial intelligence-based automated valuation model (AI-AVM) using the decision tree and the boosting techniques to predict residential property prices in Singapore. We use more than 300,000 property transaction data from Singapore’s private residential property market for the period from 1995 to 2017 for the training of the AI-AVM models. The two tree-based AI-AVM models show superior performance over the traditional multiple regression analysis (MRA) model when predicting the property prices. We also extend the application of the AI-AVM to more homogenous public housing prices in Singapore, and the predictive performance remains robust. The boosting AI-AVM models that allow for inter-dependence structure in the decision trees is the best model that explains more than 88% of the variance in both private and public housing prices and keep the prediction errors to less than 6% for HDB and 9% for the private market. When subject the AI-AVM to the out-of-sample forecasting using the 2017-2019 testing property sale samples, the prediction errors remain within a narrow range of between 5% and 9%.

Інтереси стейкхолдерів на первинному ринку житлової нерухомості

Інтереси стейкхолдерів на первинному ринку житлової нерухомості

Residential property market determinants: evidence from the 2018 Australian market downturn

PurposeThe purpose of this paper is to validate and uncover the key determinants revolving around the Australian residential market downturn towards the 2020s.Design/methodology/approachApplying well-established time series econometric methods over a decade of data set provided by Australian Bureau of Statistics, Reserve Bank of Australia and Real Capital Analytics, the significant and emerging drivers impacting the Australian residential property market performance are explored.FindingsBesides changes in the significant levels of some key traditional market drivers, housing market capital liquidity and cross-border investment fund were found to significantly impact the Australian residential property market between 2017 and 2019. The presence of some major positive economic conditions such as low interest rate, sustainable employment and population growth was perceived inadequate to uplift the Australian residential property market. The Australian housing market has performed negatively during this period mainly due to diminishing capital liquidity, excess housing supplies and retreating foreign investors.Practical implicationsA better understanding of the leading and emerging determinants of the residential property market will assist the policy makers to make sound decisions and effective policy changes based on the latest development in the Australian housing market. The results also provide a meaningful path for future property investments and investigations that explore country-specific effects through a comparative analysis.Originality/valueThe housing market determinants examined in this study revolve around the wider economic conditions in Australia that are not new. However, the coalesce analysis on the statistical results and the current housing market trends revealed some distinguishing characteristics and developments towards the 2020s Australian residential property market downturn.

A gamma generalised linear model as an alternative to log linear real estate price functions

Orientation: Residential property markets play an important role in economies, informing policy development and decision-making. However, measuring quality-adjusted growth is difficult because of the heterogeneity of properties. Hedonic regression is frequently used in real estate econometric studies as a quality-adjusted technique to estimate residential property prices for the development of price indices. Log linear models are typically used to derive these hedonic price functions. Research purpose: This article develops hedonic pricing functions using generalised linear models for South African residential property listings over a 5-year period. Motivation for the study: A parametric alternative to the log linear model is investigated to address the limited studies conducted in South Africa. An important feature of this study is the inclusion of different property types and the geographic scope. Research approach/design and method: The data set consisted of 415 200 residential properties from all over South Africa. The data spanned a period from January 2013 to August 2017. Several generalised linear models were developed and compared. Main findings: The gamma generalised linear model provided the best overall fit, generalising well to the unseen validation data. An added benefit of this model is that the estimates were kept on the original scale, avoiding the need for back transformation which is an appealing feature of any model. A dummy locational variable was shown to account for the spatial dependency in the data. Practical/managerial implications: This framework provides property market participants with the ability to quantify the utility derived over the marginal distribution of the physical characteristics of properties. This research presents the groundwork to create a property price index where index number theory could be applied to the counterfactual predicted values obtained from hedonic price models to measure price inflation over time Contribution/value-add: This study analysed the South African residential property market based on an online company’s data, purportedly covering the entire market. No real estate hedonic price studies have been identified in South Africa with this level of scope. The gamma generalised linear model is a novel candidate to develop parametric real estate hedonic price functions.

Intrinsic bubbles and Granger causality in the Hong Kong residential property market

This study uses the intrinsic bubbles detection method to identify housing bubbles in the Hong Kong residential property market. By using sample period data from 1993 to 2019, the empirical results show evidence of intrinsic bubbles. Based on the unit root and co-integration tests, I found that there are no rational speculative bubbles in the Hong Kong residential property market. Furthermore, by using the Granger causality tests of the corresponding asymmetric VECM specification, there is no causality from lagged changes in the rental price returns to changes in the property price returns. However, there is strong evidence to show that changes in the property price index returns can Granger cause changes in the rental price index returns.