Multivariate Dynamic Analysis and Forecasting Models of Future Property Bubbles: Empirical Applications to the Housing Markets of Spanish Metropolitan Cities

Francesco Tajani, Pierluigi Morano, Maria Paz Saez-Perez, Felicia Di Liddo and Marco Locurcio
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Francesco Tajani: Department of Architecture and Design, Sapienza University of Rome, Via Flaminia 359, 00196 Rome, Italy
Pierluigi Morano: Department of Civil Engineering Sciences and Architecture, Polytechnic University of Bari, Via Orabona 4, 70125 Bari, Italy
Maria Paz Saez-Perez: Department of Building Construction, University of Granada, Avda. del Hospicio, 18010 Granada, Spain
Felicia Di Liddo: Department of Architecture and Design, Sapienza University of Rome, Via Flaminia 359, 00196 Rome, Italy
Marco Locurcio: Department of Civil Engineering Sciences and Architecture, Polytechnic University of Bari, Via Orabona 4, 70125 Bari, Italy

Sustainability, 2019, vol. 11, issue 13, 1-21

Abstract: The cogency of evaluation models able to predict future trends and to monitor the consequences of scenarios different from those initially expected has been determining a growing scientific interest for the development of financial sustainability methods. With reference to quarterly time series collected for the metropolitan area of five Spanish cities, in this research an innovative methodology has been implemented, in order to make explicit, for each case study, the main functional relationships between the housing prices and the socio-economic factors. The models obtained are characterized by both high statistical performance and compliance with the expected market phenomena, highlighting the decisive role in the housing price formation of the factors that indirectly represent the population’s income capacity (market rents, unemployment level, mortgages). Then, an empirical procedure for the construction of the future property value trends has been developed. The results point out the forecasting and monitoring potentialities of the methodology used, as a fundamental decision support tool in the urban planning policies of the local administrations, interested in anticipating and checking future housing bubbles through appropriate economic policies, and for private operators, in the phases of selection of the most attractive territorial areas for new property realizations.

Keywords: housing prices; housing bubbles; market rents; unemployment level; number of mortgages (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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