Estimating housing price bubbles for investment and owner-occupancy

Yang Yang and Mingquan Zhou

Applied Economics, 2024, vol. 56, issue 55, 7339-7351

Abstract: This study probably marks the first attempt to differentiate between investment and owner-occupancy when measuring real estate price bubbles. The housing tenure and leverage status of each residential sale in the Auckland housing market are identified, and four groups of transactions are created: leveraged investment (LI), leveraged owner-occupancy (LO), unleveraged investment (UI) and unleveraged owner-occupancy (UO). This research applies a present value model to estimate housing price bubbles for the four groups. We discover that, in terms of the duration and size of bubbles, there are minor differences among the four groups. In addition, the overvaluation for all groups is mainly related to momentum behaviour.

Date: 2024
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DOI: 10.1080/00036846.2023.2281292

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