Housing Vacancy and Rental Adjustment: Evidence from Hong Kong

Raymond Y. C. Tse and Bryan D. MacGregor
Additional contact information
Raymond Y. C. Tse: Department of Building and Real Estate, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, bsrtse@polyu.edu.hk.
Bryan D. MacGregor: Centre for Property Research, Department of Land Economy, University of Aberdeen, Aberdeen, AB24 3UF, UK, b.d.macgregor@abdn.ac.uk.

Urban Studies, 1999, vol. 36, issue 10, 1769-1782

Abstract: The traditional rental adjustment equation is flawed in that the equilibrium paths for the adjustment of rents and vacancy rates cannot hold simultaneously over time. This paper suggests a two-equation model of rental adjustments based on adaptive expectations rather than the single-equation model presented in the traditional literature, and provides empirical tests. Annual data from the housing market in Hong Kong during the 1980-96 period are consistent with the adjustment equation. The results also show that the rate of change of real rents is neutral with respect to inflation.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:36:y:1999:i:10:p:1769-1782

DOI: 10.1080/0042098992818

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