House Price Forecasting from Investment Perspectives

Song Shi, Vince Mangioni, Xin Janet Ge, Shanaka Herath, Fethi Rabhi and Rachida Ouysse ()
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Song Shi: School of the Built Environment, University of Technology Sydney, Sydney, NSW 2007, Australia
Vince Mangioni: School of the Built Environment, University of Technology Sydney, Sydney, NSW 2007, Australia
Xin Janet Ge: School of the Built Environment, University of Technology Sydney, Sydney, NSW 2007, Australia
Fethi Rabhi: School of Computer Science and Engineering, University of New South Wales, Sydney, NSW 2052, Australia

Land, 2021, vol. 10, issue 10, 1-17

Abstract: Housing market dynamics have primarily shifted from consumption- to investment-driven in many countries, including Australia. Building on investment theory, we investigated market dynamics by placing investment demand at the center using the error correction model (ECM). We found that house prices, rents, and interest rates are cointegrated in the long run under the present value investment framework. Other economic factors such as population growth, unemployment, migration, construction activities, and bank lending were also important determinants of the housing market dynamics. Our forecasting results show that the Sydney housing market will continue to grow with no significant price decline in the foreseeable future.

Keywords: housing market dynamics; price forecast; error correction model (ECM); Sydney housing market (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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