An examination of house price bubble in the real estate sector: the case of a small island economy – Fiji

Mohsin Khan, Rup Singh, Arvind Patel and Devendra Kumar Jain

International Journal of Housing Markets and Analysis, 2021, vol. 14, issue 4, 745-758

Abstract: Purpose - This paper aims to assess the equilibrium house price in the city of Suva (Fiji) and to analyse the house price bubble in the Fiji housing market. Design/methodology/approach - This paper adopts a time series approach to determine the presence of house price bubbles in Fiji over the period from 1988 to 2018. Findings - The findings suggest that real income, land cost, building material price, inflation rate, volatility, household size and wealth have a positive impact on house prices, whereas user cost of capital and political disturbances have a negative impact. The findings further indicate that the Fijis’ housing market does not constitute any house price bubble. Practical implications - This paper draws policy implications for a small developing state (Fiji) and other similar economies. Originality/value - The price bubble in the Fiji housing market is analysed for the first time. This paper develops a comprehensive empirical approach to assess the equilibrium-housing price in Fiji.

Keywords: Housing price bubble; Housing market analysis; Housing policy; Equilibrium housing price in Fiji; Small island developing states (SIDS); R31; R51; E44; G01 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijhmap:ijhma-05-2020-0056

DOI: 10.1108/IJHMA-05-2020-0056

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