Overheated behaviours and spread effects: an analysis of London’s housing market

I-Chun Tsai

International Journal of Urban Sciences, 2023, vol. 27, issue 1, 65-92

Abstract: This paper takes the London housing market as an example to discuss whether housing markets with more significant overheating effects have a greater influence on other housing markets. The spillover effect of London’s housing market has been the subject of much literature, but the empirical results of the relevant literature are inconsistent. This paper proposed a new perspective to explain these inconsistent conclusions: Whether the housing market is overheated or not can affect the spread effect of a regional housing market. The paper estimated the indicators of real estate overheated behaviours and market connectedness. Further, it revealed that when real estate overheated behaviours became more severe, the irrationally high house prices resulted in spread effects. The empirical results also showed that when the overheating effect occurred in London’s housing market, the rental yield of its adjacent regions significantly increased; specifically, the rental yield of a region increased with its closeness to London. The results of this study provide an explanation for the variation in spread effects. This study also indicated that when studying the influence of the relatively booming housing markets on other regions, it is necessary to test the prosperity status of these housing markets to more accurately estimate the spread effects of these markets.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/12265934.2022.2089202 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rjusxx:v:27:y:2023:i:1:p:65-92

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjus20

DOI: 10.1080/12265934.2022.2089202

Access Statistics for this article

International Journal of Urban Sciences is currently edited by Dongjoo Park and Mack Joong Choi

More articles in International Journal of Urban Sciences from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().