Housing Speculation Research Articles

From Laissez Faire to a Market Mechanism: the Formation of Housing Finance in Taiwan

Abstract The literature on East Asian developmental states has mostly focused on economic policies; few studies have investigated how developmentalism affects urbanisation. This study addresses this gap by analysing the formation of a housing system by the developmental state and the role of the housing sector in the transition from an economic miracle in the 1960s to stagnation after the 1990s. Wang, Lee, and Chen (2017) argued that Taiwan’s state bureaucrats played a gradually diminishing role in directing the market. This article takes a different approach by arguing that the government’s interventions on housing intensified after the 1990s; housing finance sectors were formalised, squatters were removed, and interventions based on market mechanisms were employed to stimulate the housing market. However, the lack of an effective state intervention on housing made speculation difficult to control and created an obstacle to economic development. Such housing speculation increased social inequality.

Shrinking Cities for Economic Growth? Insights From the Housing Sector

This research focuses on examining how the pursuit of economic growth can contribute to urban shrinkage. In contrast to the prevalent definition of urban shrinkage that links population loss to insufficient levels of economic growth, this study examines the case of Coimbra, Portugal, where something different is happening. We hypothesise that Coimbra experiences population loss due to urban policies that promote economic growth through housing speculation. We conclude that the hypothesis is valid using semi-structured interviews and document analysis as data collection methods. The identified phenomenon disproportionately affects younger and vulnerable residents, forcing them to relocate due to unaffordable housing options. However, it benefits the local authority and national government, which collaborate with global economic powers that invest in real estate to accumulate capital. The conformist and legalistic-bureaucratic nature of the Portuguese planning system, evident in Coimbra’s local authority, exacerbates the problem. We emphasise the potentially transformative impact of economic degrowth thinking on housing policy. The implications of this research question the validity of mainstream economic theory as commonly applied to urban planning.

The Impact of Curbing Housing Speculation on Household Entrepreneurship in China

We document a speculation channel and complement the well-documented collateral channels by offering novel evidence about the effect of curbing housing speculation policies We estimate the positive effect of discouraging housing speculation on household entrepreneurship in China. By exploiting the city-level variations in the stringency of home purchase restrictions between 2011 and 2019 and five waves of China Household Finance Survey (CHFS) data, we find that discouraging housing speculation significantly increases the likelihood of local households starting a business. To address endogeneity concerns, we exploit plausibly exogenous variation using IV estimations and DID research design. The positive effect is stronger for local multiple-home owners, homeowners without mortgage debt, households with previous entrepreneurial experience, households of risk-loving, and households with large assets. This conclusion is robust with city-level evidence. In the mechanism discussion, we find that discouraging housing speculation significantly reduces the likelihood and the plans of local households to purchase new homes and lowers the house price expectations of local households (thus the opportunity cost of starting a business). We also provide evidence supporting the view that discouraging housing speculation increases entrepreneurial opportunities, innovative development, and local households’ social network investments, all of which contribute to starting a business. The results imply that policies to curb housing speculation can lead to beneficial spillover on entrepreneurship and the local economy, as well as contribute to the sustainability of economic growth.

Liquidity constraints and speculation: Evidence from the housing-resale restriction policy in Qingdao, China

ABSTRACT This article seeks to explore the efficacy of the Housing-Resale Restriction (HRR) policy in curtailing housing speculation, complementing existing literature that primarily examines the impact of taxation. The HRR policy directly reduces speculative opportunities through heightened liquidity constraints. Employing the methodology of regression discontinuity in time (RDiT), this study analyzes the impact of liquidity constraints on housing price growth rates based on the monthly community-level data from Qingdao, China, where the HRR policy was the most stringent in terms of scope and holding time requirement. The results show that the HRR policy reduced housing price growth rates by 1.3881 to 2.1001% points on average. Moreover, the disincentive impact was less pronounced in affluent, recently developed communities and those near subway stations. These findings provide valuable insights for policymakers to regulate the real estate market, mitigate excessive speculation, and prevent market bubbles.

Freedom to Flourish

One cause of gentrification and displacement of multigenerational communities of color has been the increase of private equity firms buying affordable homes, upgrading them, raising rents, and evicting tenants. This essay focuses on housing financialization and the increasing shift from the use value of housing as a place to live to the exchange value of housing as a commodity and investment for corporate profit. After identifying the problem of gentrification and housing speculation in Oakland, California, the essay draws on ecowomanist/mujerista/feminist sources to offer a theological foundation in support of housing as a social good for the freedom of households and communities to flourish. It also argues that religious organizations have a moral commitment and role to play in offering an alternative vision of community and in organizing for housing and racial justice.

The capitalization of crime in the city of real estate

This article explores how the relationship between crime and property values is reshaped by the transformation of houses into investible assets. Departing from neoclassical economics of crime, we introduce the notion of “capitalization of crime” to illustrate how crime is utilized to generate forward-looking financial expectations and shape housing markets in gentrifying neighborhoods. The study, based in Haifa, Israel, combines quantitative and qualitative data to demonstrate how investors and renters each play a role in constructing the value of crime by capitalizing crime in opposite directions. First, using a geographic information system to map crime alongside real-estate prices, we show that the effect of crime on property values is offset by prospects of future gentrification, thereby contributing to housing speculation. Second, using digital ethnography, we show how renters use “crime” to dampen investor expectations, reduce rents, and delay their displacement. Thus, our study adds to the established body of critical criminology, which examines the manipulation of crime for economic and political gains. It further contributes to emergent debates in urban criminology by explicating how the financialization of rental housing is remaking urban politics of crime and criminalization.

A Study on the Measurement of Real Estate Bubble Based on GSADF: A Case Study of Four Super First-tier Cities in China

The problem of high house prices is particularly prominent in super first-tier cities, and real estate bubbles are affecting the healthy development of the real estate industry. This paper applies the GSADF model to measure the year-on-year sales price indices of new commercial dwellings in four super first-tier cities in China, Beijing, Shanghai, Guangzhou, and Shenzhen, from 2011M01 to 2022M08, to examine the time points when their bubbles occur and burst. Results show that the bubbles in the four cities mainly appear in six time periods, and the maximum values of GSADF statistics all appear in 2013M03-2013M05, and the peak and frequency of the bubbles decrease significantly after 2018. Therefore, this paper suggests that we continue to adhere to the principle of "no speculation in housing"; improve the land use policy and build a multi-level housing supply system and continue to implement city-based regulation and control.

The Impact of Economic Uncertainty on the Cash Flow of Listed Real Estate Companies in China

After the policies of "no speculation in housing" and "three red lines" have been introduced one after another, more real estate enterprises have heard the news of "thunder explosion" one after another. Based on this, it is particularly important to explore how real estate companies can develop under the influence of increasing economic policy uncertainty. Among them, cash flow is very important for real estate enterprises. Based on this, this paper uses TVP-VAR model to simulate the impact of economic policy uncertainty on the cash flow of listed real estate companies in the important regulatory period and time point of national policies. It is found that the cash flow of operating activities is most affected by economic policy uncertainty, while the cash flow of financing activities is relatively less affected by economic policy uncertainty. Cash flow from short-term operating activities is more sensitive to impact performance, and cash flow from investment activities is more intense in the long run; At the same time, it explains the conclusion that the government is making efforts to end the "barbaric era" of capital power. Based on the conclusion, this paper puts forward some enlightenment, such as strengthening cost management and strategic adjustment, and for high-risk real estate enterprises, we can consider looking for positioning transformation.

Saving structure, housing speculation, and economic growth in the Iranian economy

Saving structure, housing speculation, and economic growth in the Iranian economy

Has the Newly Imposed Property Tax Controlled Housing Prices? An Analysis of China’s 2009–2020 Interprovincial Panel Data

The stability of the real-estate market is crucial to China’s economic development and, in times of crisis, the economy will experience systemic adverse reactions that require appropriate regulation by the state using tax policy tools. Therefore, we analyzed the impact of real-property tax on house prices using panel data for 31 provinces in China from 2009 to 2020 using an empirical method, i.e., the instrumental variables approach. The empirical results show that each of the previous property-related taxes actually contributed to the increase in house prices and did not have a dampening effect. The newly introduced property tax will lead to a decline in house prices, which will help to alleviate the overheating of real-estate investment and mitigate the real-estate bubble crisis. A rational view of the impact of a property tax on housing prices needs to be taken in the context of factors such as income levels, consumer price levels, loan rates, and Chinese consumer culture. In order to achieve the goal of “no speculation in housing”, we also need to pay attention to the regulating effect of a property tax in combination with many other factors. This study is important for promoting property tax reform, curbing overheated real-estate investment, and promoting healthy economic development.

The Current State of Development of The Real Estate Sector in The Context of The New Crown Epidemic and The Direction of Subsequent Development

In February 2020, the Ministry of Finance and the Central Bank published articles emphasising the positioning of "no speculation in housing" and not using real estate as a means of short-term economic stimulation, and promoting the improvement of the basic economic housing security system; various places made policy adjustments in respect of housing provident funds and land rentals, etc. Policy adjustments were made in various areas such as housing fund and land concessions. The impact of the new epidemic has increased China's fiscal spending, and the real estate economy, as a source of revenue, plays an integral role in the country's socio-economic development. The arrival of the epidemic will also have a serious impact on our economy, with consumer habits changing; the erratic nature of the epidemic will make people more inclined to "tighten their belts" and use their assets for emergencies, and the real estate industry will cool down as a result. In the era of rapid development of big data, the real estate industry is getting a more systematic and comprehensive data and provides a different perspective for its subsequent development direction, and a more objective understanding of the current situation of the real estate industry under the influence of the epidemic. This study is based on the Newcastle pneumonia epidemic and uses big data networks to understand the current economic development of the real estate sector, and to analyse and deduce the subsequent development of the real estate sector and the direction of adjustment in accordance with the current situation, in order to promote the steady development of the real estate economy and thus reduce the impact of the Newcastle epidemic on the national economy and revenue growth.

Developing Urban Design Research with VINEX

During the mid-1990s and the first two decades of the 2000s, the Netherlands underwent a super zoning programme called VINEX to redevelop peripheral areas. The initial objective is to change to an urban landscape design project for high-density housing, favouring places that tend to be elitist. This research looks first at the evolution of VINEX on urban landscape design and then at how the recent NR development programme has sought to correct housing speculation. Finally, by comparing the objectives of VINEX and the NR programme, this research aims to highlight how land reclamation can also be achieved through new policies of green landscape and social inclusion and not only through land consumption, a peculiar characteristic of Dutch planning.

Evictions, Foreclosures, and Global Housing Speculation in Palma, Spain

Over the last two decades, the property bubble and the subsequent economic crisis and post-crisis policies have heightened urban inequalities, mainly in cities in southern Europe. The gaps between social classes have widened with the configuration of new urban spaces characterized by segregation and exclusion. Palma is the capital of one of the top tourist destinations in the Mediterranean (the Balearic Islands) and it is usually regarded as a successful tourism model and a land of opportunity for property investors. Nevertheless, serious problems of inequality exist in the city. The centre of this dual city is split between a process of spreading gentrification and the urban blight of its poor neighbourhoods. Son Gotleu is a particular case in point. The neighbourhood is home to a large number of social housing blocks (1960s) with residents from mostly migrant backgrounds. Within a global context of new redefined rent-seeking mechanisms, this article analysed impoverishment in Son Gotleu, based on three variables associated with housing: evictions, foreclosures and the property market. Our study shows that evictions were a determining feature of impoverishment, linked to the emergence of new speculative investment interests. Indeed, investment funds are very probably the most influential urban agents today.

Grassroots struggles challenging housing financialization in Spain

Spain was one of the most severely hit countries by the 2008 global financial crisis. More than ten years after, the belated economic recovery has hardly changed the roots of that crisis, especially the financialization of the real estate sector. Remarkably, from 2009 to the present, several grassroots struggles have questioned those roots and demanded solutions to the affordability housing crisis. In this study, we examine two salient cases: the campaign against the Bankia bank and opposition to the international investment fund Blackstone. Both firms forced thousands of home evictions upon financially broken homeowners and tenants, respectively, the latter doing so via sharp rent increases. Here we investigate the claims, protest repertoires and achievements of these housing struggles. Our analysis shows that every type of grassroots’ response was shaped by a distinct process of capital accumulation through the financialization of housing. The first was driven mainly by austerity policies and the second by state-led actions to reignite housing speculation.

Non-recourse mortgage law and housing speculation

Borrowers in states with non-recourse mortgage law face limited liability on their mortgage loans. Using a regression discontinuity design at state borders, we show that non-recourse law causes greater increase in housing prices during the U.S. housing boom in the 2000s by encouraging speculative investment demands. Non-recourse states experience greater investment-purpose housing purchases with highly leveraged mortgages during the boom period 2004–2006. We find that the emergence of the originate-to-distribute model enables lenders to effectively shift risk to other investors, thereby promoting excessive loan originations and amplifying the housing price increase in non-recourse states during a boom period.

Cost Control of Real Estate Companies in the Era of Big Data

With the reform of the domestic economic system, the logic of the real estate industry is changing, and the industry structure is also undergoing reshaping. Three red lines, two red lines and centralized land supply, these three policies have allowed the entire industry to revolve around housing speculation, deleveraging, stabilizing land prices, housing prices, stabilizing expected development, high leverage and high profitability era disappear, the real estate industry is facing great downward pressure, which requires real estate companies to strengthen cost accounting control and maintain their core competitiveness. This article analyzes and discusses the cost structure of real estate enterprises and the existing problems in the control status. Based on the background of big data, this paper proposes strategies to strengthen the development cost control of real estate enterprises, aiming to provide reference and reference for cost control in the same industry.

Socially oriented cooperative housing as alternative to housing speculation. Public policies and societal dynamics in Denmark, the Netherlands and Spain

National housing systems increasingly combine three main types of housing: the private property sector (home ownership and private rental), social and public rental (public and non-profit sectors) and cooperative (social or civil economy). The dominant private type has facilitated housing speculation, which in many countries has become a critical source of economic inequality and instability. The cooperative housing type can be a viable alternative with a socio-spatial cohesion effect. This article compares the phenomena of socially oriented cooperative housing in three European countries (Denmark, The Netherlands and Spain). The analytical focus is on the public policies and regulations, and the societal and collective action factors that foster the development of housing cooperatives. The three cases present different institutional settings and ways to develop a socially oriented cooperative housing sector. The research findings contribute to mutual learning processes in searching alternatives to the commercial and very expensive private urban housing provision.

Gameday homes: Mapping emerging geographies of housing speculation and absentee ownership in the American South

Cities around the world are increasingly marked by the proliferation of speculative real estate developments that are owned, but rarely occupied, by the global elite. This paper examines the emergence of a particular form of speculative real estate development unique to smaller college towns across the American South, largely as a result of the regional prominence of American football: the gameday home. Just like luxury real estate in global cities, gameday homes are rarely inhabited by their owners and serve primarily as an investment vehicle, but also serve to reshape the character of urban space and put increased pressure on local housing markets. This paper represents the first known attempt at quantifying and analyzing the local geographies of gameday home investments, using a case study of Starkville, Mississippi. While estimates of gameday homes are inherently fuzzy, it is argued that gameday homes represent somewhere between 5% and 10% of the total housing units in the city. Ultimately, it is argued that even though such vacant investment properties do little to improve the lives of local residents, the tax revenue generated by such properties makes it unlikely that such forms of speculation will be regulated moving forward.

Credit Supply and Housing Speculation

Abstract Credit supply expansion boosts housing speculation and amplifies the housing cycle. The surge in private-label mortgage securitization in 2003 fueled a large expansion in mortgage credit supply by lenders financed with noncore deposits. Areas more exposed to these lenders experienced a large relative rise in transaction volume driven by a small group of speculators, and these areas simultaneously witnessed an amplified housing boom and bust. Consistent with the importance of belief heterogeneity, house price growth expectations of marginal buyers rose during the boom, while housing market pessimism among the general population increased.

Housing prices and speculation dynamics: a study of Auckland housing market

ABSTRACT Many housing markets across the globe have experienced upward trends in real estate prices during the past two decades. The dynamics between housing prices and speculation have been analysed by existing housing literature, but this study has a few features that may deepen the understanding of this topic. This research uses transaction-level data, focuses on only investor-purchase records, distinguishes leveraged transactions from unleveraged ones and adopts a new proxy for property speculation. Furthermore, the price elasticity of housing supply has been examined as the price responsiveness is important for understanding the topic in a supply-constrained market. We build a stock adjustment model to estimate the elasticity and a vector error-correction model to conduct Granger causality tests, impulse response analyses and a variance decomposition analysis. The findings uncover a feedback loop in a market with inelastic housing supply: investors’ speculative behaviour lifts Auckland housing prices which in turn spur further housing speculation.